Lagerlöf, Johan, (2001), “Costly Information Acquisition and Delegation to a ‘Liberal’ Central Banker,” Economics & Politics 13(3), 221-236 (lead article).
Abstract This paper develops a model of monetary policy in which the central banker can acquire costly information about a supply shock. It is shown that, with this assumption, it may be optimal for society to delegate to a “weight-liberal” central banker, a result which contrasts with that of Rogoff (1985). This result points at a limitation of Rogoff’s argument. It may also explain why the issue of delegating monetary policy to an independent and “weight-conservative” central banker often is politically controversial.
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