Finance and monetary policy styles

Abstract

This chapter explains the trajectory of finance and monetary policy styles and policies produced since 1945. It examines three policy styles: hierarchical-proactive (lasting from 1945 to the early 1970s), consensual-reactive (prominent from the late 1970s through the GFC), and the refined type of the consensual-reactive style (emerging in the post-GFC context). It argues that finance and monetary policy have transformed from heavy state control in the wake of the Second World War to an industry-dominant pressure pluralist mode in the post-GFC era, demonstrating a mere refinement of the consensual-reactive style despite the re-emergence of the state in crisis management policies. The chapter shows that shifts in styles took place as financial crises challenged the legitimacy of policy styles, monopoly of policy subsystems, and policy paradigms.