Abstract
Does a larger monetary union mean easier monetary policy? It depends to a large extent on the structure of the European Central Bank (ECB) and the process by which its members are appointed. In May 1998, the European Union decided who was to be in and out of the European Monetary Union (EMU). The ins subsequently decided who will run the ECB. Who influences the appointment process, and what does the process imply for monetary policy? This chapter attempts to address these questions using a formal model of the appointment process. Results indicate that the institutional structure of the appointment process combined with the status quo at the time of the appointments may ensure relatively tight monetary policy despite the entrance of traditionally high inflation countries like Italy, Greece, or the potential new members from Eastern Europe.
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Chang, K.H. (2003). The European Central Bank. In: Franzese, R., Mooslechner, P., Schürz, M. (eds) Institutional Conflicts and Complementarities. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-4062-2_10
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DOI: https://doi.org/10.1007/978-1-4757-4062-2_10
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