An argument in favor of long terms for central bankers

- We examine the appointment of central bankers in a New Keynesian model.
- Longer terms make the government choose more conservative central bankers.
- Hence, longer terms alleviate the stabilization bias and are socially desirable.

Drawing on the canonical New Keynesian model, we assess the impact of central bankers' term duration on governments' appointment choices. We show that longer terms induce the government to appoint more conservative central bankers, which is socially desirable.