ABSTRACT
Central bankers are increasingly in the limelight of public attention, monitored with the same obsession traditionally reserved to celebrities. The chapter aims to strengthen the general knowledge and understanding of what central banks are and do. It tries to show that key questions around central banking are both accessible to non-economists and intellectually interesting, in some cases even entertaining. The chapter explains modern central banking, in its open and problematic aspects, to a wider audience. Central banks are now part and parcel of a system based on fiat money, but for most of their existence they have been tied to a metallic standard, based on gold or silver. The economic system faces a fundamental coordination problem with fiat money. In theory, any form of paper currency and any other worthless object could have a monetary role. The chapter also presents an overview on the key concepts discussed in this book.
