Central bankers in government appointed

Abstract

I study the policy choices of members of a central bank committee, who are
appointed by the government. Central bankers balance their desire to protect the
Central Bank's reputation against their interest to be reappointed. Committees can
be more successful than single central bankers at reducing inflation and isolating
policy from government pressures. These gains are only achieved if the committee
is small, and its members' turnover rate is low. The former implies high probability
that a single vote affects policy, while the latter is associated with a low risk of
being replaced for not supporting the government's preferred policy.