Lords of Finance:Central bankers and their blind spots


A little while ago I commented on Niall Ferguson’s review for the FT of Lords of Finance, a new book on 4 key central bankers in the 1920s and 1930s.

The Economist has a review in the current edition. I was taken by these comments:-

This absorbing study of the first collective of central bankers is provocative, not least because it is still relevant. Mr Ahamed, who was a World Bank economist and now manages investments in America, likens central bankers to Sisyphus. This was the man whom the gods condemned to roll a large stone up a steep hill only for it to roll down again when it reached the peak. These great central bankers were so wedded to a dogma that they were incapable of imagining its failure.

Perhaps this kind of single-mindedness is endemic to central bankers; since the early 1990s the idea of controlling inflation at all costs has been so compelling that central bankers have ignored such unintended consequences as bubbles in the housing and stock markets. But these were big enough, when they burst, to trigger a worldwide slump. Not lords of finance surely; more like high priests.

The more I hear about this book the more I am determined to get a copy.

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