Behavioral Monetary Policymaking: Economics, Political Economy and Psychology
42 Pages Posted: 8 Jan 2019
Date Written: January 2019
This chapter reviews the evolution of the theory of monetary policy design since the 1980s, highlighting the emerging role of central banker psychology. Three subsequent stages are evident. First, the central bank was considered as an independent institution (modern economics). Second, central bankers were assumed to be delegated bureaucrats (advanced political economy). Third, a link with psychology was established (behavioural economics).
Keywords: MONETARY POLICY, POLITICAL ECONOMICS, BEHAVIORAL ECONOMICS
JEL Classification: E52, E58, E03
Suggested Citation: Suggested Citation