Monetary Macroeconomics and Central Banks in Turbulent Times

In a lecture at the MEKON 2023 international conference, CNB Deputy Governor Jan Frait discussed how one rather narrow and quite technical approach came to dominate macroeconomics. “Central banks in developed countries, especially in Europe, have lost price stability in the last two years. We now need to assess why this happened and how to prevent it in the future. One reason is probably an over-reliance on model recommendations,” he said, adding that he saw a rather strong conflict between the exact scientific thinking in the ideal of the natural sciences and the excessive uncertainty associated with the unpredictable behaviour of social systems.