The Green Central Banking Pendulum:  Political Cueing, Central Banker Sensibility, and Citizen Beliefs

The Green Central Banking Pendulum: Political Cueing, Central Banker Sensibility, and Citizen Beliefs | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article The Green Central Banking Pendulum: Political Cueing, Central Banker Sensibility, and Citizen Beliefs donato masciandaro, manuela moschella This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6686291/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This article uses a political economy approach to offer a positive analysis of the green activism of a special bureaucracy—an independent central bank—that designs its own monetary and supervisory policies. Three drivers explain the evolution of the central bank’s green activism: the green political attitude, which reflects how the incumbent politicians would like to involve the central bank in climate-change policies and considers such involvement as political cueing; the green sensibility of the central bankers involved in such policies; and the attention citizens pay to these issues though their beliefs. Given the preferences of the incumbent politicians and bureaucrats, and their relevance for the citizens, green activism can be interpreted in either a hostile or cooperative way depending on the extent to which the different preferences are homogeneous. With homogeneous preferences, the political wishes strengthen the central bank’s aims. With disparate preferences, the politicians bend the central bank to their agenda. The de facto “stretching” of the given de jure central-bank mandate and the corresponding macroeconomic effects are endogenous results, the importance of which depends on citizens’ beliefs. JEL classification: D02, E52, E58, E61 central bank monetary policy supervisory policy climate change political economy Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6686291","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":464375608,"identity":"e238bb65-a4c7-41e8-a3a7-7d3c2518e64f","order_by":0,"name":"donato masciandaro","email":"data:image/png;base64,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","orcid":"","institution":"Bocconi University","correspondingAuthor":true,"prefix":"","firstName":"donato","middleName":"","lastName":"masciandaro","suffix":""},{"id":464375609,"identity":"51dbbfa5-33af-4eef-b2b4-039241e0b307","order_by":1,"name":"manuela moschella","email":"","orcid":"","institution":"University of Bologna","correspondingAuthor":false,"prefix":"","firstName":"manuela","middleName":"","lastName":"moschella","suffix":""}],"badges":[],"createdAt":"2025-05-17 10:23:09","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6686291/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6686291/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":87784940,"identity":"c310ada7-2a19-4def-8499-471fb1de998d","added_by":"auto","created_at":"2025-07-29 03:31:54","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":489165,"visible":true,"origin":"","legend":"","description":"","filename":"MASMOSCENTRALBANKGREENACTIVISMManuscrptNewest.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6686291/v1_covered_cb871775-3097-4f83-9677-13b175a59b61.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"The Green Central Banking Pendulum: Political Cueing, Central Banker Sensibility, and Citizen Beliefs","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"central bank, monetary policy, supervisory policy, climate change, political economy ","lastPublishedDoi":"10.21203/rs.3.rs-6686291/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6686291/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis article uses a political economy approach to offer a positive analysis of the green activism of a special bureaucracy—an independent central bank—that designs its own monetary and supervisory policies. 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