Does a Good Central Banker make a Difference?

Matthias Neuenkirch and Peter Tillmann

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: The personalities of central bankers moved center stage during the recent financial crisis. Some central bankers even gained “superstar” status. In this paper, we evaluate the pivotal role of superstar central bankers by assessing the difference an outstanding governor makes to economic performance. We employ school grades given to central bankers by the financial press. A superstar central banker is one receiving the top grade. In a probit estimation we first relate the grades to measures of economic performance, institutional features, and personal characteristics. We then employ a nearest neighbor matching approach to identify the central bankers which are closest to those receiving the top grade and compare the economic performance across both groups. The results suggest that a superstar governor indeed matters: a topgraded central banker faces a significantly more favorable output-inflation trade-off than his peers.

Keywords: Central banking; inflation expectations; monetary policy; nearest neighbor matching (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013
New Economics Papers: this item is included in nep-cba and nep-mon
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: DOES A GOOD CENTRAL BANKER MAKE A DIFFERENCE? (2016)
Working Paper: Does a good central banker make a difference? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201354

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