Why Being Unpopular is Expensive for Countries
Notes de l’épisode
Being a country’s central banker is a technical job. But, just like high school, if you are a popular central banker, it pays off. Aditi Sahasrabuddhe is a political scientist at Brown University, and has researched just how much it pays to be popular. It’s the kind of question that the field of economics largely neglects. Aditi looks at central-bank-likeability through the manifestation of swap lines, currency exchanges made available between two economies. These become especially important in a moment of crisis, and a close connection between central bankers can mean the difference between an economy that sinks and one that swims.
Further Reading:
Aditi Sahasrabuddhe: Banker’s Trust
Liaquat Ahamed: Lords of Finance
Financial Times: Swap lines are geopolitical infrastructure
Financial Times: A less independent Fed raises risks to a key crisis tool
Financial Times: Will the Fed continue to assume its global responsibilities?