Unexpected Revolutionaries: How Central Banks Made and Unmade Economic Orthodoxy

Central banks are typically regarded as conservative, politically neutral institutions that uphold conventional macroeconomic wisdom. Yet in the wake of the 2008 global financial crisis and COVID-19, central banks have upended observer expectations by implementing largely unknown and unconventional monetary policies.
In her book, “Unexpected Revolutionaries: How Central Banks Made and Unmade Economic Orthodoxy,” Manuela Moschella argues that the political nature of central banks lies at the heart of these transformations. While formally independent, central banks need political support to justify their policies and powers, and to obtain it, they carefully manage their reputation among their audience-selected officials, market actors and citizens.
Challenged by reputational threats brought about by twenty-first century recessionary and deflationary forces, central banks such as the Federal Reserve System and the European Central Bank strategically deviated from orthodox monetary policies to preempt or manage political backlash and to regain public trust. Central banks so evolved into a new role only in coordination with fiscal authorities and on the back of public contestation.
On Thursday, March 21, the Boston University Global Development Policy Center hosted a webinar featuring Manuela Moschella, Professor of Political Science at the University of Bologna, on the institutional transformation of central banks from the 1970s to the present.
This event is part of the Spring 2024 Global Economic Governance Book Talk series.