However, in practice - because Walsh’s optimal contracts can be roughly approximated at best, because both the incentives and the policy decisions faced by central bankers are far more complex than can be captured by simple models, and because the appointment of an inflation-averse central banker may provide additional assurance to the public that the government and the central bank will keep their promises - the Walsh approach and the Rogoff approach are almost certainly complementary.13 That is, a clear, well-articulated monetary policy framework; inflation-averse central bankers; and autonomy for central banks in the execution of policy are all likely to contribute to increased central bank credibility and hence better policy outcomes.
Of course, other factors that I  10  An objection to this conclusion is that, although the central bank’s incentives are made clear by the contract, the public might worry that the government might renege on its commitment to low inflation by changing the contract.