Designing a Central Bank in a Federal System: The Deutsche Bundesbank, 1957-1992

  • Susanne Lohmann

Abstract

Deutsche Mark und Deutsche Bundesbank — mit einem dunklen Rätsel nähern sich beide ihrem Ende.1 In November 1990, the presidents of the central banks of the member states of the European Community (EC) published a proposal for the statute of a European central bank (ECB). According to this proposal, the primary objective of the bank will be to maintain price stability. The bank will be required to support the economic policy of the Community, but without prejudice to the objective of price stability. The ECB and its national member banks will be granted independence from political interference. The bank’s directorate will be composed of a president, a vice-president and four other members, all of which will be appointed by the European Council for eight years without the possibility of renewal. These appointees will form the bank’s council together with the twelve presidents of the national central banks. Decisions will be made by simple majority rule. Generally one member will have one vote, the president a tie-breaking vote; but for some issues weighted voting will apply.2

Keywords

Europe Income Defend Stake Milton 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Alesina, Alberto, 1987, “Macroeconomic Policy in a Two Party System as a Repeated Game,” Quarterly Journal of Economics 102: 651–678.CrossRefGoogle Scholar
  2. Ausschuβ der Präsidenten der Zentralbanken der Mitgliedstaaten der Europäischen Wirtschaftsgemeinschaft, 1990, “Entwurf des Statuts des Europäischen Systems der Zentralbanken und der Europäischen Zentralbank,” Mimeograph, November 27.Google Scholar
  3. Balkhausen, Dieter, 1992, Gutes Geld und Schlechte Politik: Der Report über die Bundesbank, Düsseldorf: ECONVerlag.Google Scholar
  4. Barro, Robert, and David B. Gordon, 1983, “Rules, Discretion and Reputation in a Model of Monetary Policy,” Journal of Monetary Economics 12: 101–121.CrossRefGoogle Scholar
  5. Bean, Charles R., 1992, “Economic and Monetary Union in Europe,” Journal of Economic Perspectives 6: 31–52.CrossRefGoogle Scholar
  6. Beck, Nathaniel, in this volume, “An Institutional Analysis of the Proposed European Central Bank: A Political Scientist’s Perspective.”Google Scholar
  7. Becker, Wolf-Dieter, 1982, “Diskussion über ein Bundesbankgesetz im Wissenschaftlichen Beirat beim Bundes Wirtschaftsministerium,” Beihefte zu Kredit und Kapital 7: 61–77.Google Scholar
  8. Becker, Wolf-Dieter, 1988, “Vierzig Jahre Geldpolitik: Erinnerungen, Tendenzen und Probleme,” Mimeograph, Technical University of Aachen.Google Scholar
  9. Bendor, Jonathan, and Susanne Lohmann, 1993, “Institutions and Credible Commitment,” Mimeograph, Stanford University, February.Google Scholar
  10. Brady, David, Susanne Lohmann and Douglas Rivers, 1992, “Party Identification, Retrospective Voting, and Moderating Elections in a Federal System: West Germany 1961-1989,” Graduate School of Business Research Paper No. 1231, Stanford University, December.Google Scholar
  11. Bulmer, Simon, 1989, “Territorial Government,” in: Developments in West German Politics, eds. Gordon Smith, William E. Paterson, Peter H. Merkl, Durham: Duke University Press: 40–59.Google Scholar
  12. Bundesrat, 1992, “Sitzungsbericht: 641. Sitzung-3. April 1992,” Mimeograph, Bonn.Google Scholar
  13. Caesar, Rolf, 1981, Der Handlungsspielraum von Notenbanken, Baden-Baden: Nomos Verlagsgesellschaft.Google Scholar
  14. Council of the European Communities and Commission of the European Communities, 1992, Treaty on European Union, Luxembourg: Office for Official Publications of the European Communities.Google Scholar
  15. Cukierman, Alex, and Allan Meltzer, 1986, “A Positive Theory of Discretionary Policy, the Cost of Democratic Government, and the Benefits of a Constitution,” Economic inquiry 24: 367–388.CrossRefGoogle Scholar
  16. Deutsche Bundesbank, 1989, “Die Deutsche Bundesbank: Geldpolitische Aufgaben und Instrumente,” Sonderdrucke der Bundesbank Nr. 7, 5th edition, Frankfurt am Main, FebruaryGoogle Scholar
  17. Deutsche Bundesbank, 1988, “Dreiβig Jahre Deutsche Bundesbank: Die Entstehung des Bundesbankgesetzes vom 26. Juli 1957,” Frankfurt am Main.Google Scholar
  18. Deutsche Bundesbank, 1992, “Viertes Gesetzes zur änderung des Gesetzes über die Deutsche Bundesbank (4. BBankGÄndG)”, Mimeograph, Bonn, July 15.Google Scholar
  19. Dickertmann, Dietrich, 1991, “Deutsche Bundesbank: Landeszentralbanken vor einer Strukturreform?” Universität Trier, FBIV: Schwerpunkt Finanzwissenschaft/ Betriebliche Steuerlehre Arbeitspapier Nr. 24, October.Google Scholar
  20. Einecke, Helga, 1992, “Bundesbank wird erheblich schlanker,” Süddeutsche Zeitung, August 21.Google Scholar
  21. Flood, Robert, and Peter Isard, 1990, “Monetary Policy Strategies,” International Monetary Fund Staff Papers 36: 612–632.CrossRefGoogle Scholar
  22. Frankfurter Rundschau, 1992, “Leere Worte,” August 5.Google Scholar
  23. Friedman, Milton, 1945, “A Monetary and Fiscal Framework for Economic Stability”, American Economic Review 38: 245–264.Google Scholar
  24. Fratianni, Michele,Jürgen von Hagen, and Christopher Waller, 1992, “The Maastricht Way to EMU,” Essays in International Finance No. 187, Princeton University, June.Google Scholar
  25. Goodman, John, 1991, “The Politics of Central Bank Independence,” Comparative Politics 23: 329–349.CrossRefGoogle Scholar
  26. Goodman, John, 1992, Monetary Sovereignty, Ithaca: Cornell University Press.Google Scholar
  27. Grünewald, Joachim, 1992, “Die Neue Bundesbankorganisation,” Börsen-Zeitung, June 19.Google Scholar
  28. Hibbs, Douglas, 1977, “Political Parties and Macroeconomic Policy,” American Political Science Review 7: 1467–1487.CrossRefGoogle Scholar
  29. Jochimsen, Reimut, et al., 1991, “Zur Anpassung des Bundesbankgesetzes gemäβ Einigungs vertrag,” Wirtschaftsdienst XI: 554–559.Google Scholar
  30. Kaltenthaler, Karl Christian, 1993, “The Bundesbank and German Federalism: The Politics of Institutional Change,” Mimeograph, Washington University in St. Louis.Google Scholar
  31. Könneker, Wilhelm, 1957, “Vom Zentralbanksystem zur Deutschen Bundesbank,” Zeitschrift für das gesamte Kreditwesen 20: 796–798.Google Scholar
  32. Kreps, David M., 1990, “Corporate Culture and Economic Theory,” in: Perspectives on Political Economy, eds. James E. Alt and Kenneth A. Shepsle, Cambridge: Cambridge University Press.Google Scholar
  33. Kydland, Finn E., and Prescott, Edward C, 1977, “Rules Rather than Discretion: The Inconsistency of Optimal Plans”, Journal of Political Economy 85:473–491.Google Scholar
  34. Lohmann, Susanne, 1990, “Monetary Policy Strategies-A Correction: Comment on Flood and Isard,” International Monetary Fund Staff Papers 37: 440–445.CrossRefGoogle Scholar
  35. Lohmann, Susanne, 1992, “Optimal Commitment in Monetary Policy: Credibility versus Flexibility,” American Economic Review 82, March 1992.Google Scholar
  36. Lohmann, Susanne, 1993a, “Federalism and Central Bank Autonomy: Political Business Cycles in West Germany, 1960–1989,” Mimeograph, UCLA, October.Google Scholar
  37. Lohmann, Susanne, 1993b, “Institutional Sources of Central Bank Autonomy: The Politics of German Monetary Policy, 1960-1989,” Mimeograph, UCLA, October.Google Scholar
  38. Lohmann, Susanne, 1993c, “Testing the Conservative Central Banker Hypothesis: The Deutsche Bundesbank, 1960-1989,” Mimeograph, UCLA, October.Google Scholar
  39. Marsh, David, 1992, Die Bundesbank: Geschäfte mit der Macht, Munich: C. Bertelsmann.Google Scholar
  40. Maxfield, Sylvia, 1992, “Private Constituencies and the Power of the State: Monetary Authorities in Newly Industrializing Countries,” Mimeograph, Yale University, January.Google Scholar
  41. Persson, Torsten, and Guido Tabellini, 1990, Macroeconomic Policy, Credibility, and Politics, Chun Harwood Academic Publishers.Google Scholar
  42. Reuter, 1992, Reuter Monitor, Mimeograph, June 17.Google Scholar
  43. Rogoff, Kenneth, 1985, “The Optimal Degree of Commitment to an Intermediate Monetary Target,” Quarterly Journal of Economies’. 1169–1189.Google Scholar
  44. Rogoff, Kenneth and Anne Sibert, 1988, “Elections and Macroeconomic Policy Cycles,” Review of Economic Studies 55: 1–16.CrossRefGoogle Scholar
  45. Schumpeter, Joseph A., 1976 [1943], Capitalism, Socialism and Democracy, London: George Allen & Unwin.Google Scholar
  46. Sturm, Roland, 1989, “The Role of the Bundesbank in German Politics,” West European Politics 12: 1–11.CrossRefGoogle Scholar
  47. Tabellini, Guido, 1987, “Reputational Constraints on Monetary Policy: A Comment,” Carnegie-Rochester Conference Series on Public Policy 26: 183–190.CrossRefGoogle Scholar
  48. Taylor, John B., 1983, “Comments on’ Rules, Discretion and Reputation in a Model of Monetary Policy’,” Journal of Monetary Economics 12: 123–125.CrossRefGoogle Scholar
  49. Vaubel, Roland, 1993, “Eine Public-Choice-Analyse der Deutschen Bundesbank und ihre Implikationen für die Europäische Währungsunion,” in: Europa vor dem Eintritt in die Wirtschafts-und Währungsunion, eds. Dieter Duwendag and Jürgen Siebke, Berlin: Duncker and Humblot.Google Scholar
  50. von Hagen, Jürgen, 1992, “Budgeting Procedures and Fiscal Performance in the European Communities,” Mimeograph, University of Mannheim, May.Google Scholar
  51. von Spindler, Joachim, 1957, “Der Kampf um die Bundesnotenbank,” Zeitschrift für das gesamte Kreditwesen 5: 167–169.Google Scholar
  52. Wagenhöfer, Carl, 1957, “Der Föderalismus und die Notenbankverfassung,” in: Festschrift zum 70. Geburtstag von Dr. Hans Ehard, München: Richard Plaum Verlag.Google Scholar
  53. Waller, Christopher J., 1989, “Monetary Policy Games and Central Bank Politics,” Journal of Money, Credit and Banking 21: 422–431.CrossRefGoogle Scholar
  54. Waller, Christopher J., 1992a, “A Bargaining Model of Partisan Appointments to the Central Bank,” Journal of Monetary Economics 29: 411–428.Google Scholar
  55. Waller, Christopher J., 1992b, “The Choice of a Central Banker in a Multisector Economy,” American Economic Review 82: 1006–1012.Google Scholar
  56. Walsh, Carl, 1992, “Optimal Contracts for Central Bankers,” Mimeograph, University of California at Santa Cruz, July.Google Scholar

Copyright information

© Springer Science+Business Media New York 1994

Authors and Affiliations

  • Susanne Lohmann

There are no affiliations available

Personalised recommendations