Economists, Economic Knowledge, and Central Banks

What do economists do in central banks? Why do central banks hire economists? This book investigates the evolving role of economists and economic knowledge within central banks, arguing that their current centrality is neither self-evident nor historically inevitable. While the presence and influence of economists in central banks today may seem natural, this book shows that it is the result of a complex, gradual, and uneven historical process shaped by institutional structures, disciplinary transformations, and shifting relationships between science and policy. Drawing on a rich but dispersed body of literature, the book traces how economists progressively gained authority through the establishment of statistics departments, the adoption of macroeconometric models, and the emergence of a shared cognitive infrastructure between academia and central banks. Rather than focusing on individuals or doctrines, it examines general trends and institutional shifts across a series of national case studies to show how central banks function as boundary organizations, at the intersection of policy and science.'bullionist controversy' of the early nineteenth century about the convertibility of paper money. See e.g., Kynaston (2017, 89-98), Laidler (1989), Arnon (2011).14 On different 'traditions' in monetary thinking, see e.g. O'Brien (2007), Mehrling (2010), Laidler (2010), and Dimand (2010).15 This influence is particularly relevant with respect to three major topics: the issue of convertibility (guaranteeing the convertibility of Bank of England's notes into gold at a fix rate) and its effect on prices; the actions needed to manage gold inflows and outflows; and the role of the Bank as the 'lender of last resort', which refers to offering loans to commercial banks