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Central banking through the centuries

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  • Ivo Maes

    (National Bank of Belgium and Robert Triffin Chair, Université catholique de Louvain and ICHEC Brussels Management School)

Abstract

Anniversaries are occasions for remembrance and reflections on one’s history. Many central banks take the occasion of an anniversary to publish books on their history. In this essay we discuss five recent books on the history of central banking and monetary policy. In these volumes, the Great Financial Crisis and the way which it obliged central banks to reinvent themselves occupies an important place. Although this was certainly not the first time in the history of central banking, the magnitude of the modern episode is remarkable. As comes clearly to the fore in these volumes, there is now, also in the historiography of central banking, much more attention to the (shifting) balance between price stability and financial stability. The history of central banking is more perceived as one of an institution whose predominant concern varied between “normal” times and “extraordinary” times. So, central banks will have to remain vigilant, as one should expect financial crises to return. Moreover, the new world of central banking, with a greater responsibility of central banks for financial stability, will make life more complicated for central banks. It may have also consequences for central bank independence, as the modalities of the two mandates, price and financial stability, are not the same. Another aspect which comes to the fore in these volumes is the relationship between central banking and state formation. Historically, central banks have been embedded in processes of nation-building. By extending their network of branches across the country, or by being at a center of a system of liquidity provision, ultimately tied to the national currency, they played a key role in the shaping of “national economies”.

Suggested Citation

  • Ivo Maes, 2018. "Central banking through the centuries," Working Paper Research 345, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201810-345
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp345en.pdf
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    References listed on IDEAS

    as
    1. Bordo,Michael D. & Eitrheim,Øyvind & Flandreau,Marc & Qvigstad,Jan F. (ed.), 2016. "Central Banks at a Crossroads," Cambridge Books, Cambridge University Press, number 9781107149663.
    2. Jobst, Clemens & Kernbauer, Hans, 2016. "The Quest for Stable Money," University of Chicago Press Economics Books, University of Chicago Press, number 9783593505350, Febrero.
    3. Edvinsson,Rodney & Jacobson,Tor & Waldenström,Daniel (ed.), 2018. "Sveriges Riksbank and the History of Central Banking," Cambridge Books, Cambridge University Press, number 9781107193109.
    4. Eitrheim,Øyvind & Klovland,Jan Tore & Øksendal,Lars Fredrik, 2016. "A Monetary History of Norway, 1816–2016," Cambridge Books, Cambridge University Press, number 9781107150409.
    5. Baltensperger,Ernst & Kugler,Peter, 2017. "Swiss Monetary History since the Early 19th Century," Cambridge Books, Cambridge University Press, number 9781107199309.
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    Cited by:

    1. Ghassan, Hassan B., 2016. "Re-examining the equation of exchange according to Shariah rationale money," MPRA Paper 91666, University Library of Munich, Germany, revised Jul 2018.

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    More about this item

    Keywords

    central banking; financial stability; price stability; Great Financial Crisis;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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