A model of appointing governors to the Central Bank

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Facultad de Ciencias Económicas y Empresariales. Instituto Complutense de Análisis Económico (ICAE)
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In this paper, a formal model has been developed to analyze the appointment of individuals to serve as central bank governors in a two-party political system when confinnation hearings exist and monetary policy is determined according to a majority-rule voting system. lile major results of the paper are that appointed governors will tend to be more moderate (i) if the nominating party and the confirming party do not coincide, (H) the lower the chance the nominating party and the confrrming party coincide in the future, (in) if the term governors must serve out overlaps an electian, (iv) as the next election approaches, and (v) the lower the probability the nominating party wins the next election. Some of these theoretical results are consistent with existing empírical evidence related to tbe Board of Governors of the Federal Reserve System.
En este trabajo se desarrolla un modelo para analizar el nombramiento de individuos como miembros del consejo del banco central en un sistema político bipartidista cuando dichos miembros deben ser confirmados por el Parlamento y la política monetaria se determina mediante la regla de la mayoría en el consejo del banco central. El principal resultado obtenido es que los gobernadores nombrados tenderán a ser más moderados (i) si el partido nominador y el confirmador son diferentes, (ii) cuanto menor sea la probabilidad de que ambos partidos coincidan en el futuro, (iii) si el mandato que debe servir un gobernador se solapa con una elección, (iv) a medida que la próxima elección se acerca, y (v) cuanto menor sea la probabilidad de que el partido hoy en el gobierno gane la próxima elección, Varios de estos resultados teóricos son consistentes con la evidencia empírica existente para el Consejo de Gobernadores del Sistema de la Reserva Federal.
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