Central Bank Design

摘要

Starting with a blank slate, how could one design the institutions or a central bank for the United States? This question is not as outlandish as it may seem. As soon as the Iraq war ended in 2003, "the first major issue that Coalition economists confronted: What should be done with the Iraqi dinar?" (Foote, Block, Crane, and Gray 2004, p. 60). The economists involved stated that adopting a new central bank law in March 2004 was one of their first and most important economic accomplishments, and a similar judgment would hold true when independent central banks were created in most transition countries as well. Even looking at high-income economies, in 1992, Europeans had to answer to this question after they signed the Maastricht Treaty (von Hagen 1997). The US Federal Reserve has not been an institution set in stone; slowly, and with turns in different directions, its structure has been molded over 100 years into what it is today.