Most studies of the political economy of money focus on the laws protecting central banks from government interference; this book turns to the overlooked people who actually make monetary policy decisions. Using formal theory and statistical evidence from dozens of central banks across the developed and developing worlds, this book shows that monetary policy agents are not all the same. Molded by specific professional and sectoral backgrounds, and driven by career concerns, central bankers with different career trajectories choose predictably different monetary policies. These differences undermine the widespread belief that central bank independence is a neutral solution for macroeconomic management. Instead, through careful appointment and retention of central bankers, partisan governments can and do influence monetary policy – preserving a political trade-off between inflation and real economic performance even in an age of legally independent central banks.
Replication Data: Available here for selected chapters; more coming soon.
Mikael Wendschlag, Financial History Review, March 2014, 21(1), 103–106.
Francesco Visconti, “Unveiling the Myth of Central Bankers’ Neutrality,” The International Spectator, March 2014, 49(1), 152–154.
Donato Masciandaro, Journal of Economic Literature, March 2014, 52(1), 223–226.
Chris Rogers, Journal of Global Faultlines, September 2013, 1(1), 157–158.
John Quiggin, “Bookplugs,” Crooked Timber, 17 September 2013.
Michael Knigge, “Yin or yang for the Fed?,” Deutsche Welle, 14 August 2013.
José Fernández Albertos, “La neutralidad de los bancos centrales,” El Diario, 8 July 2013.
Lars Christensen, “Christopher Adolph on the politics of central banking,” The Market Monetarist, 17 February 2012.
José Fernández Albertos, “Astérix, Spiderman y el Banco de España,” El País, 17 October 2011.
Howard Davies, “The Bank should pick a deputy for our times,” Financial Times, 28 May 2008.
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