The unanchored central banker

Join us for the book launch of The Unanchored Central Banker.

Through little fault of their own, central banks face an erosion of their ability to fight inflation single-mindedly as they have done in the past.

In this sequel to Charles Goodhart and Manoj Pradhan's first book, The Great Demographic Reversal, they argue that (i) demography and recent trends in immigration will lead to much greater fiscal deterioration than forecasts suggest, (ii) real interest rates will rise because government dissavings will handily counterbalance any increase in household savings in an increasingly aged society, and (iii) as China’s disinflationary influence subsides over the medium-term, inflation will rise.

Could AI offset demographic headwinds? Possibly, but AI is unlike technological shocks of the past, and history suggests innovations tend to lead to net gains in employment, especially in the medium term. Similarly, China could generate uncertain near-term effects, but is unlikely to be a disinflationary force in the medium term.

The net outcome for monetary policy is not encouraging. Fighting inflation in highly indebted economies can lead to financial instability in the near term, or (ironically) more inflation in the future. The glory days of central banks, the authors argue, may be behind us.

There will be no book sales on the event day. Copies of the book can be ordered from Amazon.

Event hashtag: #LSECentralBanker

Meet our speakers and chair

Charles Goodhart was trained as an economist at Cambridge (Undergraduate) and Harvard (PhD).  He then entered into a career that alternated between academia (Cambridge, 1963-65; LSE, 1967/68; and again 1985 to date), and work in the official sector, mostly in the Bank of England (Department of Economic Affairs, 1965/66; Bank of England, 1968-85; Monetary Policy Committee, 1997-2000).  He is now Norman Sosnow Professor Emeritus at LSE.  He has worked throughout as a specialist monetary economist, focusing on policy issues and on financial regulation, both as an academic and in the Bank.  He devised ‘the Corset’ in 1974, advised HK on ‘the Link’ in 1983, and RBNZ on inflation targeting in 1988.  Recently, he has written, co-authored with Manoj Pradhan, a book on The Great Demographic Reversal, suggesting that the decades of disinflation and falling interest rates would come to an end. Charles is the author of Goodhart’s Law “that any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”

Manoj Pradhan is the founder of Talking Heads Macroeconomics, an independent research firm based in London, and co-author of The Great Demographic Reversal with Charles Goodhart. Manoj was previously Managing Director at Morgan Stanley, where he led the Global Economics team, driving macroeconometric research into global economic themes. He joined Morgan Stanley in 2005 after serving on the faculty of George Washington University and the State University of New York. He has a PhD in economics from George Washington University and a Master’s in Finance from the London Business School.

Sir Charles Bean is Emeritus Professor of Economics at LSE and Chairman of the Centre for Economic Policy Research. Between 2016 and 2021, he was also a member of the Budget Responsibility Committee at the Office for Budget Responsibility. From 2000 to 2014, he served at the Bank of England as Chief Economist and then Deputy Governor for Monetary Policy, sitting on both the Monetary Policy and Financial Policy Committees and representing the Bank internationally at the G7 and G20. Before joining the Bank, he was a member of the economics faculty at LSE and has also worked at HM Treasury. He has served as Managing Editor of the Review of Economic Studies and in 2016 produced a major review of the quality, delivery and governance of UK economic statistics at the request of the government. He was knighted in 2014 for services to monetary policy and central banking, and was President of the Royal Economic Society from 2013 to 2015. He holds a PhD from MIT.

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