The Politics of Central Banking: No more Free Lunches

Session Submission Type: Full Paper Panel

Session Description

Independent central banks have long been hailed as perhaps the only “free lunch” in economics, but recent research in political economy finds this claim to be exaggerated. In this panel, we bring together new insights into the politics of central banking. Bodea and Kerner show that gender diversity in central bank leadership changes bank behavior. Gavin and Manger use a model of the reputational benefits of either pliant or independent behavior to show that central bankers are far from neutral agents. Grittersova investigates whether financial markets pay attention to politicians’ statements and what this means for the Bank of England’s true independence. Finally, Ainsley uses Indian data to show that attempts to reach “underbanked” populations with mobile banking can actually exacerbate economic inequalities.

Sub Unit

• DIVISION 16: International Political Economy

Individual Presentations

• Gender Diversity in Central Banks: What are the Consequences? - Cristina Bodea, Michigan State University; Andrew Kerner, Michigan State University

• De Facto and De Jure Central Bank Independence - Michael A. Gavin, Washington University in St. Louis; Mark S. Manger, University of Toronto

• Do Financial Markets Listen when Politicians Talk about Monetary Policy? - Jana Grittersova, University of California, Riverside

• On the Distributive Consequences of Monetary Regulation - Caitlin T. Ainsley, University of Washington

Chair

• David H. Bearce University of Colorado, Boulder

Discussant

• David H. Bearce University of Colorado, Boulder