New Architectures in the Supervision of Financial Markets
Edited by Donato Masciandaro
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 steps are discussed. First, the central banker was considered as an independent and benevolent player (modern economics). Second, central bankers were assumed to be delegated bureaucrats (advanced political economy). Third, a link with psychology was established (behavioural economics).