Central banks’ knowledge controversies

In the last few years, the Federal Reserve, the European Central Bank and the Bank of Canada have all initiated policy reviews to reassess monetary policy tools and ideas that were no longer working in a changing global economy. In this paper, I argue that the debates that shaped these reviews can best be understood as 'knowledge controversies' in which some of the foundational metrics that monetary policies rely on themselves became the subject of debate. This unsettling of existing economic metrics poses not just technical but also political problems for central banks. These debates have eroded their efforts to depoliticise key issues, revealing the fragility of their technical fixes as metrics themselves can become the source of political disagreement both within the central banks themselves and in the wider public. As we enter an era of even more intense inflation-driven debates about central banking expertise and authority, these reviews provide insights into the epistemic dilemmas that central banks confront, suggesting that they will be dealing with knowledge controversies for some time to come.