Overview

Drawing on numerous interviews with high-ranking and founding members of the European Central Bank (ECB), Karl Kaltenthaler identifies and explains the factors that shape the bank's domestic and international monetary strategies. As at all institutions, politics are very much involved in policy-making at the ECB. Kaltenthaler finds that instead of being unconcerned with how the bank's policies impact the citizens of the Eurozone, the central bankers desire to keep the economy healthy. This desire is driven by the central bankers' two primary personal preferences: to appear competent to as much of society as possible and to maintain broad political support for their operational independence. The policy-making model that offers the best roadmap to a healthy economy is that of the German Bundesbank. To secure the long-term needs of the economy, the decisionmakers in the ECB have created a model that attempts to replicate the Bundesbank's success at the European level and to lend credibility to their own policies. Offering unprecedented access to the internal decisionmaking at the ECB, Policymaking in the European Central Bank will interest readers who want to understand this important European institution.

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Reviews

Policymaking in the European Central Bank makes an important contribution to the literature on European monetary cooperation. In contrast to the prevailing literature 's emphasis on the institutional structure of the European Central Bank, Karl Kaltenthaler skillfully examines the factors that explain the policy choices of independent central bankers. Based on public choice theory, he presents a compelling explanation for the decision by Europe 's central bankers to largely emulate the policy strategy of Germany 's central bank, the Bundesbank. This book is essential reading for those interested in the European Union and monetary policymaking more generally.--Matthias Kaelberer

Author Information

Karl Kaltenthaler is faculty fellow in the Bliss Institute for Applied Politics at the University of Akron. He also teaches in the Department of Political Science at Case Western Reserve University.

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