Monetary Policy Instrumentation and the Relationship of Central Banks and Governments

Abstract

Despite the importance of monetary policy in economic management and the substantial stakes involved in monetary policy decisions, political scientists have almost entirely ignored important political questions involving both monetary policy and central banks. This article organizes in formation about central banks, the institutional focus of much of monetary policy, and central bankers. Two dimensions of monetary policy instrumentation, complexity and concentra tion, are defined and related to differences in the relations of central banks to governments and interest groups.