“Institutions reduce uncertainty by constraining human action. Thereby, they enable economic actors to form expectations about the actions of others.” (Streit et al., 1997, p. 688.) Will the Statute of the European Central Bank meet these requirements? Is it suited to creating credibility for the institution even before its start?
BIS Review 25/1998  -3-  Credibility Credibility and reputation have been developed out of a neo-classical concept of monetary policy-making, based on the natural rate of unemployment and rational expectations (Spahn, 1997, p. 235). Barro and Gordon (1983) argued that central banks are likely to suffer from a credibility problem.