The world’s central bankers hold their annual gathering at Jackson Hole today — or they would have if coronavirus had not forced them to choose a virtual format. Nevertheless the conference — formally the Kansas City Fed’s Economic Policy Symposium — remains the prime opportunity to showcase their big thinking in speeches that over the years have marked the evolution of central banking theory and practice.
As has often been the case, this year’s symposium is marked by a crisis that is forcing central bankers to quickly adapt their intellectual framework and policy toolbox. But the discussion (which you can watch online) will go beyond the current emergency, the theme being “Navigating the decade ahead”. There is a good reason for that: not only may Covid-19 fundamentally change our economies, and the role of central banking with it, but the major central banks were already undertaking major reviews of their monetary policy frameworks, including the Federal Reserve and the European Central Bank. Here in Free Lunch, we have previously discussed how central bankers need to incorporate global climate change into their policy deliberations.
The symposium should provide insight into more aspects of their thinking. Three big questions, in particular, deserve answers.