Economic Quarterly

To understand the origin of the modern central bank—its institutional structure and monetary policy—one must understand the history of the Bundesbank. The narrative history offered here examines the evolution of that institution, from the start and the collapse of the Bretton Woods system, to the experiment with aggregate demand policies in the 1970s, to the emergence of stability policy in the 1980s. The story concludes with the role the Bundesbank played during the creation of the European Central Bank.