Book contents
- Frontmatter
- Contents
- List of Figures
- List of Tables
- Preface
- 1 The Institutional Make-Up and Evolution of Central Bank–Government Relations: An Introduction
- 2 Legislation Alone Does Not a Central Bank Make: Political Structure, Governance, and Reputation in Monetary Policy
- 3 Central Bank Personalities and Monetary Policy Performance
- 4 Econometric Analysis of Central Bank Behavior: An Evolutionary Approach
- 5 Contrasting Quantitative and Qualitative Assessments of Central Bank Behavior and the Evolution of Monetary Policies
- 6 Accountability, Disclosure, and Conflict Resolution
- 7 Inflation Targets versus Other Inflation Control Measures: Two Sides of the Same Coin?
- 8 The Changing Face of Central Banking: Epilogue
- Bibliography
- Index
- Titles in the series
3 - Central Bank Personalities and Monetary Policy Performance
Published online by Cambridge University Press: 27 October 2009
- Frontmatter
- Contents
- List of Figures
- List of Tables
- Preface
- 1 The Institutional Make-Up and Evolution of Central Bank–Government Relations: An Introduction
- 2 Legislation Alone Does Not a Central Bank Make: Political Structure, Governance, and Reputation in Monetary Policy
- 3 Central Bank Personalities and Monetary Policy Performance
- 4 Econometric Analysis of Central Bank Behavior: An Evolutionary Approach
- 5 Contrasting Quantitative and Qualitative Assessments of Central Bank Behavior and the Evolution of Monetary Policies
- 6 Accountability, Disclosure, and Conflict Resolution
- 7 Inflation Targets versus Other Inflation Control Measures: Two Sides of the Same Coin?
- 8 The Changing Face of Central Banking: Epilogue
- Bibliography
- Index
- Titles in the series
Summary
INTRODUCTION
Although the major theme of this book is the interaction between policies and institutions, monetary policies have often been interpreted as the outcome of a decision by the head of the central bank. Indeed, a widely accepted notion, popularized, if not originally formulated, by Friedman (1962), is the “extraordinary importance of accidents of personality” (op. cit.: p. 234). The spate of books published over the last few decades (for example, Greider 1987; Marsh 1992; Marshall 1999; Mayer 2001; von Furstenburg and Ulan 1998) to name but a very few) on the apparent symbiosis between personalities and policies certainly lends credence to Friedman's view. Examples from economic history, however, suggest that while personalities can at times matter more than the institutions they lead, it is the intersection of personalities with infrequent crises that gives rise to the hypothesis. Perhaps this is what Friedman intended by the term accidents.
This chapter begins by asking in what sense personalities can and do matter. The analysis is carried out at various levels. First, it is argued that Friedman's hypothesis is largely anecdotal and that it is difficult to find strong evidence in the series that matters to a central bank, or in the evaluation of the conduct of monetary policy, namely inflation, for the predominance of personalities in explaining central bank performance.
Of course, personalities can influence monetary policy performance in a manner that could not have been anticipated by Friedman.
- Type
- Chapter
- Information
- The Changing Face of Central BankingEvolutionary Trends since World War II, pp. 81 - 127Publisher: Cambridge University PressPrint publication year: 2002