The Monetary Cosmopolitans

NEWTON, MASSACHUSETTS – Can you imagine a French citizen being elected President of the United States? Or a Japanese prime minister of the United Kingdom? Or a Mexican chancellor of Germany? Probably not. Indeed, even if there were no legal obstacles, it would be difficult to imagine voters in a democracy installing a foreigner in their government’s top job.

But, during the last few years, countries have increasingly turned to foreigners and people with considerable foreign experience to assume what is generally viewed as a country’s second most important position: head of the central bank. What has driven this shift, and should it be welcomed or discouraged?