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Journal des Économistes et des Études Humaines

Editor-in-Chief: Garello, Pierre

Ed. by Gentier, Antoine


CiteScore 2018: 0.14

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2153-1552
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Volume 22, Issue 2

Issues

Volume 17 (2011)

Volume 16 (2010)

Volume 15 (2009)

The Stability Properties of Monetary Constitutions

Pablo Paniagua
Published Online: 2016-06-10 | DOI: https://doi.org/10.1515/jeeh-2015-0011

Abstract

The financial crisis brought about a higher degree of monetary policy unpredictability. To anchor expectations and promote nominal stability, there is a need for predictable monetary rules or stable constitutions. This paper’s purpose is to define the general expectational properties that monetary constitutions should possess to work as coordination devices. I use Buchanan’s predictability criterion, as well as the expectational monetary transmission mechanism, to propose that monetary constitutions should be considered stable as long as they contain dynamics allowing self-reinforcing expectations of monetary neutrality. Self-reinforcement of expectations is an integral property of monetary constitutions for them to be agents of coordination and therefore stable. I find that these expectational properties are consistent with the stability properties established in the constitutional literature.

Keywords: constitutional political economy; monetary policy; monetary constitution; robust political economy

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About the article

Published Online: 2016-06-10

Published in Print: 2016-12-01


Citation Information: Journal des Économistes et des Études Humaines, Volume 22, Issue 2, Pages 113–138, ISSN (Online) 2153-1552, ISSN (Print) 2194-5799, DOI: https://doi.org/10.1515/jeeh-2015-0011.

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