The political economy of central banking: A short history of the changing role of central banks. By Alessandro Roselli. Palgrave Macmillan. 2024. 348 pp. £109.99 (hbk). ISBN: 978‐3031770357. £87.50 (ebk). ISBN: 978‐3031770364
Year: 2026
Type: book-review
Abstract: I was quite looking forward to reading and reviewing this book.The topic is one that interests me and it sounded as if this would provide some new perspectives on it.My enthusiasm lasted only briefly.Not because this is necessarily a bad book, but because while some parts are good, others are not.And the parts that are not good are bad indeed.I will return to this later and mention some of the good parts first.The author, who has worked for much his career at the Banca d'Italia and is now a visiting research fellow at the University of Buckingham, sets out to illustrate the changing role of central banks through three examples: the Bank of England, the Federal Reserve Bank of the United States, and the Banca d'Italia.His overview of their historical background is good.The inclusion of the Banca d'Italia is somewhat puzzling.However, since the author is Italian, it is a natural and obvious choice.But, as he makes clear, the history and experience of the Banca d'Italia are not only different from those of the Fed and the Bank of England (an excellent reason to include the bank in this study) but also very unusual among central banks in generalwhich prompts the question of whether another central bank, different from the Fed and the BoE but providing more generally applicable lessons, such as the Bundesbank, would have been a better choice.In the end, in some periods, the author spends as much or more time discussing the Bundesbank and/or the Banque de France as he spends on the Banca d'Italia.(Also, the Swede in me is somewhat disappointed that in a book about central banks and money, the Riksbank does not rate a single mention, neither as the oldest central bank in the world nor as a pioneer of bank notes and of price-level targeting.)Roselli's description of the challenges central banks faced in World War I, and how they dealt with them, is good.So too is his overview of the inter-war rise of the intrusive state, which eventually became the welfare state.The events surrounding the compensation paid out to owners of the Bank of England when it was nationalised, and the impact of financial repression in the late 1940s/early 1950s United States, may be familiar to other readers, but they were new to me and thus interesting.(That financial repression leads to inflation was not new to me, I hasten to add.).
Source: Economic Affairs
DOI: 10.1111/ecaf.70023
Author: Gabriel Stein
Language: English
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7128927441
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