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The Global Politics of Central Banking: A View From Political Science
This paper reviews the political science literature on central banking from the early 1990s through the present, paying particular attention to the explicit or implicit conception of politics in the works reviewed. I begin by reviewing rationalist approaches to central bank independence from both the policy supply and demand sides. In the second section, I review literature that challenges and critiques this rationalist/institutionalist paradigm and its assumptions. The third section reviews studies that locate politics within central banks themselves and that analyze decision-making processes therein. The final section builds on the strengths of the existing literature to outline a future trajectory for political science scholarship on the global politics of central banking, one that incorporates a more sophisticated conception of politics and that is attentive to the post-crisis world in which transnational forces, governing ideas and worldviews, unconventional monetary policy, and non-monetary policy central bank functions are of paramount importance.
