The Market For Central Bankers

A blog about business and economics.
April 17 2012 5:45 PM

The Market For Central Bankers

As any central bank worth its salt would tell you, barriers to labor mobility are inefficient and reduce growth. Under the circumstances, it ought to be common for central bankers who succeed in helming monetary policy at small countries are regularly offered jobs steering larger economies. In practice, it rarely happens so the idea that the Bank of England is considering trying to poach the Bank of Canada's chief to be its new head strikes people as somewhat outlandish.

But I think the limited successes and substantial failures of the Ben Bernanke Era in the United States tend to illustrate that practical central banking experience is an important qualification for a central banker. After all, the signature of the Bernanke Fed has been the failure to apply Professor Bernanke's monetary prescriptions. One interpretation of that is that Chairman Bernanke has learned valuable practical lessons that were unavailable to Professor Bernanke, and that straightforwardly implementing Professor Bernanke's ideas would have been dangerous and misguided. Another interpretation that I find more plausible is Lawrence Ball's notion that Bernanke basically chickened out when faced with opposition from the full-time staff. But either interpretation bolsters the idea that practical experience grappling with with institutional issues is extremely valuable. Promising academic monetary theorists should probably get tryouts at small countries and only come to DC or Frankfurt once they've proven themselves. The past five years, meanwhile, suggest that the ECB, Bank of Japan, and Federal Reserve should be scrambling to hire monetary policymakers from countries such as Israel, Australia, Sweden, Canada, and Switzerland that have succeeded in stabilizing their macroeconomies while larger monetary units have failed.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Jurisprudence

Scalia’s Liberal Streak

The conservative justice’s most brilliant—and surprisingly progressive—moments on the bench.

Colorado Is Ground Zero for the Fight Over Female Voters

There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?

The NFL Explains How It Sees “the Role of the Female”

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B

Culturebox

Theo’s Joint and Vanessa’s Whiskey

No sitcom did the “Very Special Episode” as well as The Cosby Show.

Television

The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Cliff Huxtable Explains the World: Five Lessons From TV’s Greatest Dad

Why Television Needs a New Cosby Show Right Now

  News & Politics
Weigel
Sept. 18 2014 8:20 PM A Clever Attempt at Explaining Away a Vote Against the Farm Bill
  Business
Moneybox
Sept. 18 2014 6:02 PM A Chinese Company Just Announced the Biggest IPO in U.S. History
  Life
The Slate Quiz
Sept. 18 2014 11:44 PM Play the Slate News Quiz With Jeopardy! superchampion Ken Jennings.
  Double X
Doublex
Sept. 18 2014 8:07 PM Crying Rape False rape accusations exist, and they are a serious problem.
  Slate Plus
Behind the Scenes
Sept. 18 2014 1:23 PM “It’s Not Every Day That You Can Beat the World Champion” An exclusive interview with chess grandmaster Fabiano Caruana.
  Arts
Brow Beat
Sept. 18 2014 4:33 PM The Top 5 Dadsplaining Moments From The Cosby Show
  Technology
Future Tense
Sept. 18 2014 6:48 PM By 2100 the World's Population Could Be 11 Billion
  Health & Science
Science
Sept. 18 2014 3:35 PM Do People Still Die of Rabies? And how do you know if an animal is rabid?
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.