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Central Bankers’ Shifting Goalposts

The themes of the world’s foremost gathering of central bankers in Jackson Hole, Wyoming, and of the ECB's annual meeting this year, had little to do with monetary policy. Instead, they focused on economic growth, an issue that they can do little to influence.

BRUSSELS – The theme of this year’s meeting of the world’s central bankers in Jackson Hole, Wyoming, had little to do with monetary policy. “Fostering a Dynamic Global Economy” is, of course, an important topic. But it is telling that the European Central Bank chose, for its own annual gathering, a similar “non-monetary” topic (“Investment and Growth in Advanced Countries”).

There is nothing wrong with central bankers considering challenges in areas like growth, trade, and investment. But central banks were made independent precisely because it was understood that they would be held accountable for achieving their own objective of maintaining price stability, regardless of the economy’s underlying growth rate. So why is it that central bankers would rather look at external issues than focus on their own area of responsibility?

The answer, it seems, is that they cannot quite explain their current approach.

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