TY  - JOUR
AU  - Gaspar,Vitor
AU  - Kashyap,Anil K.
TI  - Stability First: Reflections Inspired by Otmar Issing's Success as the ECB's Chief Economist
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12277
PY  - 2006
Y2  - June 2006
UR  - http://www.nber.org/papers/w12277
L1  - http://www.nber.org/papers/w12277.pdf
N1  - Author contact info:
Vitor Gaspar
Banco de Portugal
Special adviser 
Av. Almirante Reis, 71 - 8
1150-012 Lisboa
Portugal
Tel: 00322-2966388
E-Mail: vitor.gaspar@ec.europa.eu

Anil Kashyap
Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-7260
Fax: 773/702-0458
E-Mail: anil.kashyap@chicagobooth.edu
M2  - featured in NBER digest on 2006-06-05
AB  - In this paper, we review Otmar Issing's career as the ECB's inaugural chief economist and we document many notable successes. We try to infer some general principles that contributed to these successes and draw some lessons. In doing so, we review the evidence using Woodford%u2019s (2003) recent revival of the Wicksellian approach to monetary policy making. Suitably interpreted the baseline model can rationalize Issing%u2019s three guiding principles for successful policymaking. This baseline model, however, fails to account for the important role that monetary and financial analysis played in the conduct of policy during Issing%u2019s tenure. We propose an extension of the model to account for financial developments and show that this extended model substantially improves our understanding of ECB practice. We conclude by listing six open questions, relevant for the future of central banking in Europe that Issing may want to consider in case leisure allows.
ER  -