Establishing a hawkish reputation: interest rate setting by newly appointed central bank governors

摘要

In this article, we explore the interest rate setting behaviour of newly appointed central bank governors. We estimate an augmented Taylor (1993) rule for 15 OECD countries and the period 1974 to 2008. We find that newly appointed governors fight inflation more aggressively during the first four to eight quarters of their tenure in an effort to establish a reputation for being inflation averse.