Central bank psychology

There has been a huge amount of research on how human decision-making is affected by cognitive biases. There has also been a huge volume of research on central bank decision-making. Yet the psychology of central bank decision-making has largely been unexplored. The evolution of central bank policy frameworks over recent years can be seen as an attempt to make them robust to psychological biases. This is illustrated using the example of the Bank of England’s post-crisis policy framework.