Masters of the ‘masters of the universe’? Monetary, fiscal and financial dominance in the Eurozone

Sebastian Diessner and Giulio Lisi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The rise of central bankers to the status of new ‘masters of the universe’ has been matched by mounting allegations of political overreach. In the Eurozone, for instance, the ECB has increasingly been accused of straying into the fiscal realm. Why do politically independent central banks engage intensely and publicly with government policies, thereby threatening the neat separation between monetary and fiscal policy that was meant to protect central banks themselves from interference? While existing political economy accounts have focused squarely on the issues of government debt and central bankers' fears of fiscal dominance, we argue for the emerging role of ‘financial dominance’ throughout the crisis, thereby shedding light on the structural forces that master the new masters of the universe. To this end, we pursue a mixed-methods approach, combining quantitative text analysis techniques with a qualitative understanding of the context in which central banks communicate on fiscal policy.

Keywords: financial markets; financial crisis; political economy; government; strategic interactions (search for similar items in EconPapers)
JEL-codes: E58 G28 P16 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2019-04-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Socio-Economic Review, 19, April, 2019. ISSN: 1475-1461

Downloads: (external link)
http://eprints.lse.ac.uk/100754/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100754

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().