In This Review

The Changing Face of Central Banking: Evolutionary Trends Since World War II
The Changing Face of Central Banking: Evolutionary Trends Since World War II
By Pierre L. Siklos
Cambridge University Press, 2003, 347 pp
Purchase

The creation of the multinational European Central Bank, the Bank of Japan's much noted failure to stimulate the Japanese economy, and the elevation of Alan Greenspan to a cult hero are examples of the ways in which central banks have become highly prominent features of the economic landscape in recent years. Canadian economist Siklos provides a scholarly study of central banks in 20 industrialized countries over the past half-century, with emphasis on their structure, independence, accountability, transparency, and performance. He offers both cross-country quantitative analysis and selective case studies. Despite the universal tendency to personalize monetary policy, by reference, for example, to Greenspan in the United States, Sir Edward George in the United Kingdom, or Willem Duisenberg in Europe, Siklos finds greater continuity and slower evolution than this journalistic emphasis on personalities suggests. Over the period covered, central banks have become more transparent, effective, and independent. Furthermore, controlling inflation provides a more coherent basis for monetary policy than other stated objectives, but the record shows that central banks have not focused exclusively on this goal; they have also been sensitive to unemployment.