Central Banking in Transition: Knowledge Production and Distribution in the Federal Open Market Committee

Central Banks have made an unparalleled career in the preceding and the ongoing century. Today they are the “master sensemaker” (Abolafia) in most of the economies around the world. The transition of central banking in the long run is not only based on modified ways of policy operations but also on historically different types of knowledge that are utilized for executing monetary policy. The presentation will give an insight in our current research project which monitors the changes in knowledge production and distribution in the Federal Reserve in the period between 1977 and 2010. It is conducted as a discourse analysis of the communication process in the Federal Open Market Committee based on the verbatim transcripts of its meetings. Our project is rooted in the recently emerging sociology of economics. The sociology of economics addresses similar issues as economic sociology but is processing them with the analytical instruments of the sociology of knowledge and the sociology of science. One of the most prominent approaches in this research area is concerned with the performativity of economics: the production of economic reality according to economics. Drawing on this strand of research, our leading questions are which kinds of macroeconomic knowledge are issues at the Fed and how the transformation of academic knowledge into policy-relevant knowledge is conducted. The analysis of our data shows that macroeconomic knowledge in the Federal Reserve of the 1970s and 80s is a different species than the one stemming from academia. And even if academic macroeconomic thinking became more prominent in the Fed in the 1990s and 2000s, this cannot simply be understood as a performative effect. In the Fed, macroeconomic models have to be pragmatically translated and merged with other types of knowledge to form a different regime of problem solving than the one found in academia.