Behavioral Monetary Policymaking: Economics, Political Economy and Psychology

42 Pages Posted: 8 Jan 2019

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics (ECO); Bocconi University - Department of Economics

Davide Romelli

Trinity College (Dublin) - Department of Economics; Trinity College (Dublin)

Date Written: January 2019

Abstract

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

Masciandaro, Donato and Masciandaro, Donato and Romelli, Davide, Behavioral Monetary Policymaking: Economics, Political Economy and Psychology (January 2019). BAFFI CAREFIN Centre Research Paper No. 2019-105, Available at SSRN: https://ssrn.com/abstract=3312171 or http://dx.doi.org/10.2139/ssrn.3312171

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics (ECO) ( email )

Via G. Roentgen 1 - 5E211
20136 Milan
Italy

Bocconi University - Department of Economics ( email )

Via G. Roentgen 1 - 5E211
20136 Milan
Italy

Davide Romelli

Trinity College (Dublin) - Department of Economics ( email )

Arts Building
Room 3014
Dublin
Ireland

Trinity College (Dublin) ( email )

2-3 College Green
Dublin, Leinster D2
Ireland

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