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Adding rooms onto a house we love: Central banking after the global financial crisis
Author(s) -
Johnson Juliet,
ArelBundock Vincent,
Portniaguine Vladislav
Publication year - 2019
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/padm.12567
Subject(s) - credibility , financial crisis , monetary policy , inflation (cosmology) , order (exchange) , financial stability , price of stability , resilience (materials science) , financial system , core (optical fiber) , economics , central bank , business , monetary economics , finance , keynesian economics , political science , law , engineering , telecommunications , physics , theoretical physics , thermodynamics
This article examines the extent to which central bankers have been willing and able to rethink their beliefs about monetary policy in the wake of the global financial crisis. We show that despite the upheaval, the core pre‐crisis monetary policy paradigm remains relatively intact: central bankers believe that they should primarily pursue price stability through targeting a low inflation rate in a transparent manner, and that they need operational independence in order to achieve this goal. In a bid to address post‐crisis conditions and maintain their credibility, however, central bankers have also layered new elements onto this paradigmatic core. We document both the resilience of pre‐crisis beliefs and the process of layering using computer‐assisted text analysis and qualitative analysis of 13,586 speeches given between 1997 and 2017 by central bankers from around the world.