Noisy politics, quiet technocrats? Central banking in contentious times

Uses computational text analysis to study how central banks react to politicization.

Benjamin Braun

Maximilian Düsterhöft


In a break from the quiet politics of the pre-2008 period, when delegation arrangements were remarkably stable, many policy areas have become increasingly ‘noisy’. How do independent agencies designed for quiet politics react when contentious publics turn the volume up on them? Studying this question through the case of monetary policy, we theorize that during the contentious post-crisis decade, central banks had two strategic options. They could enter the arena of noisy politics by engaging their critics—as indeed many central banks did, eventually, on topics such as inequality and climate change. Alternatively, central banks could seek to ‘reduce the volume’ through quiet disengagement. To test this strategic silence hypothesis, we study central bank communication on sensitive topics related to the most contentious of monetary policy innovations, quantitative easing. Using regression analysis on a panel dataset of more than 11,000 central bank speeches, we find that central banks conducting QE programs exhibited strategic silence on house prices, private debt, climate change and, to a lesser extent, exchange rates. Their strategic silence varies in line with countries’ growth models and the parameters of QE programs. These findings point to significant technocratic agency in the de- and re-politicization of policy issues.

Draft paper available here.