Minsky’s moment? The rise of depoliticised Keynesianism and ideational change at the Federal Reserve after the financial crisis of 2007/08

Levingston, Oliver

doi:10.1080/09692290.2020.1772848

Cited by 11 publications

(5 citation statements)

References 77 publications

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“…While, to some extent, stress testing may also serve an epistemic function of sensitizing banks and other financial institutions to systemic risk(s) (Coombs 2020), its main attraction (for central banks) certainly lies in the fact that stress tests function as a sort of 'performative measurement' (Coombs 2020, 526): by communicating assessment criteria 'transparently', central banks can incentivize financial institutions to conform to them and produce measurable performances of central banks' regulatory success. This allows central banks to demonstrate their agency as regulators, and to frame 'financial stability as a discrete objective addressed by specific instruments', so that 'financial stability now augments (rather than replaces or amends) the inflation-targeting model of central banking' (Levingston 2021(Levingston , 1475 as a complementary but functionally separate task (Levingston 2021;Thiemann 2019). As a result, the initially announced 'macro-prudential revolution' has been 'reduced to a much more scaled back incremental approach during the process of implementation.…”

Section: The Advent Of 'Unconventional' Monetary Policy and Its Conse...mentioning

confidence: 99%

“…It renders a more reflexive governance, and organizational and social learning about the origins of crises more difficult by committing technical agencies to increasingly ritualistic pursuits of formally rational goals even while the broader structural conditions within which these tasks acquired a more substantive rationality may be eroding. As has been the case with central banking since the GFC, 'rather than opening space for a discussion about the "social purpose" … rising political turbulence [may] actually strengthen … normative commitment to de-politicisation' (Levingston 2021(Levingston , 1479. In this way, the dependence of technical agency on measurable performance(s) may work to perpetuate, and even deepen, the entanglement of this agency in the production of the very structural problems that erode its felicity conditions.…”

Section: Conclusion: How Normalizing 'Unconventional' Policies De-pol...mentioning

confidence: 99%

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Made to measure: how central banks deliver performances of their worth and why unconventional monetary policy is reversing the burden of proof

Walter

2024

Handbook on Measuring Governance

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Section: The Advent Of 'Unconventional' Monetary Policy and Its Conse...mentioning

confidence: 99%

Section: Conclusion: How Normalizing 'Unconventional' Policies De-pol...mentioning

confidence: 99%

Made to measure: how central banks deliver performances of their worth and why unconventional monetary policy is reversing the burden of proof

Walter

2024

Handbook on Measuring Governance

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“…In PPA scholarship, institutional and ideational analysis helps to examine the preferences and interests of key policy actors, the role of ideas across the policy cycle, asymmetrical power relations among policy actors, and the effect of these relations on the politics of ideas (Béland, 2019;Derthick & Quirk, 1985). Similarly, extensive IPE scholarship recognizes that, in addition to structural, institutional, or interest-based factors, ideas are consequential for social, political, and economic phenomena (Blyth, 2002;Campbell, 1998;Hall, 1989;Levingston, 2020;Nelson, 2017). The Turkish case highlights the critical role powerful politicians' ideas play in constraining central bank policy space and reducing credible commitment (North & Weingast, 1989).…”

Section: Evolving Ipe and Ppa Research On Central Bankingmentioning

confidence: 99%

Bridging international political economy and public policy and administration research on central banking

Yağcı

Bakır

2021

Policy and Society

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Central banking as an avenue of research has been of interest to scholars from International Political Economy (IPE) and Public Policy and Administration (PPA) disciplines. Nevertheless, there is very little dialogue between these two perspectives to bridge macro, meso, micro-level analyses and examine the reciprocal relationship between the global and domestic political economy context and monetary policy conduct. This article investigates the Turkish experience to bridge IPE and PPA scholarship on central banking in emerging economies. In doing so, we adopt an analytic eclectic approach combining multiple structural, institutional, and agential causal explanations with particular reference to the Structure, Institution, and Agency (SIA) theoretical framework. This is because analytic eclecticism complements, speaks to, and selectively incorporates theoretical approaches such as the New Independence Approach (NIA) of IPE and institutional and ideational PPA approaches. Drawing on the empirical context of the historical evolution of the Turkish political economy, we explore domestic and international interactions among micro, meso, and macro levels that shape central banking behavior. Our analysis also reveals how global dynamics are translated into domestic policy choices and how particular ideas influence the policymaking process. The analysis underscores the constraining and enabling influence of international dynamics, politics of ideas on emerging economy central banking, and the essential role individual and organizational agency play in the policymaking process.

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“…In doing so, the ECB completely disregarded that the success of such monetary policy innovations depends on banks' funding models which otherwise weakens the effectiveness of the policy tool . Levingston (2021) has also identified a particular reading of Keynesian ideas as being dominant within the Fed after the financial crisis. He finds that Keynesian ideas were made compatible with pre-crisis policymaking which resulted in 'depoliticized Keynesianism', which led to a selective interpretation of Keynesian and Minsky scholarship (Levingston, 2021).…”

Section: State Of the Artmentioning

confidence: 99%

“…Levingston (2021) has also identified a particular reading of Keynesian ideas as being dominant within the Fed after the financial crisis. He finds that Keynesian ideas were made compatible with pre-crisis policymaking which resulted in 'depoliticized Keynesianism', which led to a selective interpretation of Keynesian and Minsky scholarship (Levingston, 2021). Thus, ideas can enable institutional change, but they can also be an important force in preserving the status quo.…”

Section: State Of the Artmentioning

confidence: 99%

Managing Climate Change Like a Central Banker: The Political Economy of Greening the Monetary Technocracy

Quorning¹

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It is becoming increasingly clear that if we want to live up to the Paris Agreement and meet the 1.5°C commitment, our societies and economies need to undergo systemic changes at an unprecedented scale. All sectors in the economy will be affected and climate change will therefore likely impact financial and price stability. This realization has led central banks to engage with climate-related issues, leaving central bankers in an unprecedented situation: working with a policy domain outside their immediate knowledge remits. Climate change has become a mainstream issue in central banks, and it is against this background that I seek to understand how central bankers have approached the work with climate change and the extent to which central banks have been repurposed as they have set out to deal with the greatest challenge of our time: the climate crisis. The dissertation draws on insights from International Political Economy, where the dominant approach has been to view central banking from institutional, structural, or ideational perspectives. Here I utilize a micro-level analytical approach constructed around three factors: practices, expertise, and legibility. To understand how central bankers have worked with climate change, I examine the practices they have incorporated, with a focus on climate stress testing and modeling of climate-related risks. I also discuss the types of expertise deployed as I seek to understand how central bankers, trained mainly as economists, work in an entirely new policy domain such as climate change. Finally, I set out to analyze how central bankers have made climate change legible by turning climate change into a risk issue; for central bankers, climate change becomes a risk-based issue, similar to other routine economic problems. I argue central bankers have approached climate change like any other task. In treating climate change as a risk issue, central bankers have been able to work with climate change using their existing expertise and adapting their modeling frameworks to deal with climate-related risks, like any other financial risk. Thus, even though climate change represents a new policy domain, central bankers have maintained the status quo, and subsumed climate change under their current modus operandi. The necessary fundamental changes to the conduct of central banking in the age of anthropogenic climate change remain absent. Despite the urgency of the climate crisis, it is business as usual for the central banks.

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Minsky’s moment? The rise of depoliticised Keynesianism and ideational change at the Federal Reserve after the financial crisis of 2007/08

Cited by 11 publications

References 77 publications

Made to measure: how central banks deliver performances of their worth and why unconventional monetary policy is reversing the burden of proof

Made to measure: how central banks deliver performances of their worth and why unconventional monetary policy is reversing the burden of proof

Bridging international political economy and public policy and administration research on central banking

Managing Climate Change Like a Central Banker: The Political Economy of Greening the Monetary Technocracy

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