The Government of Money

Governments have increasingly given their central banks the freedom to pursue policies of price stability. In particular, the German Bundesbank and the US Federal Reserve have been models of this autonomy. This text traces the origins of their success to the political struggle to adopt monetarism. The author contends that the political involvement of monetarist economists was central to this endeavour. The book examines the initiatives undertaken by monetarists from 1970 to 1985 and the policies that resulted once their ideas were enacted. Taking a historical approach to major issues of political economy, Johnson describes both the political efforts of the monetarist economists to convert central banks to their preferred policies and the resistance offered by traditionalist central bankers, politicians and financial and labour interests.