The Politics of Central Banking
- Start: Jun 1, 2023
- End: Jun 2, 2023
- Location: Cologne
In the wake of the pandemic and the Russian invasion of Ukraine, the return of inflation further fueled public contestation of monetary policies. Moreover, by starting the process of integrating climate change into their monetary policy and financial supervision frameworks, central banks have waded into another highly politicized policy field.
The result has been a situation of unprecedented uncertainty for both central bankers and students of central banking. On the one hand, the macroeconomic and political underpinnings of the old regime – including financial and trade globalization, carbon budget obliviousness, and absence of inflationary pressures – have vanished. On the other hand, central banks’ hawkish response to the recent inflation suggests that moves to assign monetary orthodoxy to the dustbin of central bank history had been premature.
In short, this is an excellent time to take stock of the past decade and a half. Has politicization put an end to central banking as we know it or will the technocratization of macroeconomic policymaking continue? If the latter, do the benefits (if any) justify the downsides for democratic expression and participation?