This chapter provides an overview of the state of the art in constitutional and political theory with regard to the topic of central banks. Central banking, I show, is a highly political domain of policy making that raises thorny and under explored normative questions. I challenge accounts of central banking as involving limited discretion and distributional choices in the pursuit of low inflation, as well as the narrow range of normative questions that such accounts raise. I then ask what to make of central bankers’ political power from a normative perspective. As I argue, some delegation of important decisions to unelected officials is almost unavoidable, often desirable and by itself not undemocratic. I conclude by explaining that we should nonetheless be reluctant to allow for extensive central bank discretion by highlighting six crucial issues that are currently not sufficiently understood: the central bank’s actual level of autonomy from governments, the effectiveness of accountability mechanisms, the effects of depoliticizing money on the broader political system, the effects of democratic insulation on the effectiveness of central banks, the specific practices of deliberation within central banks and the scope for coordination with elected government.

This chapter looks at central bank digital currencies and aims to extend our understanding and the use cases for CBDCs in line with domestic and international economic policies. It examines central bank transactions and how money supply can be controlled and maintained using CBDCs. Over the years, the use of quantitative tightening has been limited due to the current functionality and utility of a country’s financial system. The “Klair Effect” is a form of quantitative tightening; it does not use the apparatus of interest rates to control the inflation rate; instead, a “delete button” to control the money supply on a central banks’ balance sheet.

Following military defeat in 1918, the Emperor abdicated and a Republic was declared. The 1919 Treaty of Versailles imposed devastating terms on Germany. Social, economic, and political instability fostered the growth of radical ethno-nationalist movements. Once the great inflation of 1923 had been brought under control, and reparations and foreign relations were subjected to renegotiation, the political system began to stabilise. Berlin continued to expand as an industrial metropolis, with an improved transport network and major factories between the nineteenth-century red brick churches, schools, and municipal buildings. Immigration continued, including workers from the provinces and Jews fleeing pogroms in eastern Europe. A ferment of intellectual and artistic creativity contributed to ‘Weimar culture’, while Berlin also became noted for cabaret, night life, and challenges to traditional sexual mores. Following the Wall Street Crash of 1929, the German economy collapsed, precipitating further political instability. In a situation of near civil war, on 30 January 1933 President Hindenburg appointed the leader of the NSDAP, Adolf Hitler, as German Chancellor in a mixed cabinet.

Chapter 9, Where and how to place (June 8 - June 13) the question of the placement of the government loan comes front and center. Since the second BIS loan to ANB is conditional upon the placement of the bond loan, the National Bank is increasingly under pressure and the money supply has increased as it has rediscounted for the Credit Anstalt. The CA has no more solid collateral and ANB is losing foreign exchange at an increasing rate. Meantime, Hungary is also suffering from capital flight and the nervousness over contagion and the psychology of the crisis is increasing. The conflicts between the Austrian government and the central banks increases and information is still very hard to come by, all of which contributes to the uncertainty of the situation.

The early seventeenth century was a period of economic crisis throughout Eurasia. Finance was developed enough for heads of state to raise and equip massive armies, but not developed enough to pay these armies regularly. Within the context of the Mansfeld Regiment’s financial problems, this chapter describes mutiny, desertion, female labor, and the challenges of finding small change during a financial crisis. The Mansfeld Regiment’s operations depended on a network of military finance in central Europe and northern Italy which was broadly ramifying but imperfect and disorganized. The loan that was supposed to support this regiment was delayed; by the time the money arrived, the regiment’s superiors may simply have forgotten about them. The Mansfeld Regiment collapsed two years later.

Did the threat of war trigger the extraction-coercion cycle? In this chapter I use a panel of Latin America from 1830 to 1913 to test the effects of looming international threats on domestic taxation and internal conflict. It is believed that due to the availability of foreign loans and taxable imports, states in the region did not have to engage in extraction from the local population, nor did they have to coerce individuals to comply with such policies. I summarize this argument in the form of testable hypotheses and point to factors—naval blockades and sovereign debt defaults—that might have hindered access to such external resources. I then focus on militarized interstate disputes (MIDs) and how they affected revenues, tariff levels, foreign loans, civil wars, coups, etc. My analyses show MIDs had a negative effect on tariffs and revenue and diminished the likelihood of a new loan—all results that contest the established conventional wisdom. Conversely, MIDs are associated to currency depreciation—a domestic-oriented inflationary tax—and domestic conflict—in particular, civil wars and coups. The chapter shows war did trigger the extraction-coercion cycle.

This chapter tackles two additional activities of the pollster as fortune teller. The first is the assessment and prediction of government approval ratings. As we have already seen in Chapter 8, approval ratings are extremely important in predicting elections. There is both an art and science to the analysis of such measures. Here, we want to lay out an analytical framework which will allow pollsters to assess both structural and policy factors related to approval ratings and then how to utilize multiple methods to triangulate future outcomes. We will focus on the Biden administration circa August 2022. Ultimately, a fairly large component of a pollster’s workload is the continual assessment of government initiatives and their convergence (or not) with what people want.

The second is a discussion of more context-based analysis. The pollster has an important role in helping decision-makers understand the bigger picture. Here, broader demographic and social trends help gird such analysis.

Any fair evaluation of the Conservative effect (2010–14) must be cognisant of the context. Tom Egerton’s chapter will place the Conservative premierships in the six external shocks Britain faced, beginning with the Great Financial Crash and the Eurozone Crisis, before the impact of Brexit (and a debate over its external and structural causes), Covid, the Russo-Ukrainian War and the inflation crisis. How did each government succeed or fail in the face of compounding shocks? What opportunities and constraints emerged as a result? Only through an analysis of a decade of poly-crisis, and in the perspective of wider political change, can we make a conclusion on the question of ‘fourteen wasted years’.

Paul Johnson began his relationship with the series with his analysis of Conservative economic policy in The Coalition Effect and will return, with his team, to his conclusions then, analysing not just the first period of austerity but also how Conservative economic policy has evolved through the post-referendum premierships of Theresa May, Boris Johnson, Liz Truss and Rishi Sunak.

The nature of modern economies, and their ideological dimensions. The cultural challenges of capitalist economies and their “socialist” alternatives.

The Robertson–Walker metrics are presented as the simplest candidates for the models of our observed Universe. The Friedmann solutions of the Einstein equations (which follow when a R–W metric is taken as an ansatz), with and without the cosmological constant, are derived and discussed in detail. The Milne–McCrea Newtonian analogues of the Friedmann models are derived. Horizons in the R–W models are discussed following the classical Rindler paper. The conceptual basis of the inflationary models is critically reviewed.

In Chapter 2, we briefly discuss causes and consequences of inflation to lay the foundation for a detailed analysis of the relation between monetary policy and other policy fields