They highlight the tendencies of economists to be self-referential and analyze how the social perception of the finance industry is largely negative nowadays, and the more so since the financial crisis. In that respect, the paper focuses on the United States, but there is little doubt that France probably is no exception to that rule either. After the 2007–2008 crisis, some first steps have been taken to change incentives in the financial industry. And even more should be done in that direction in the coming years. At the same time, economists should also adopt a more critical view on the financial industry practices and judge them as impartially as possible. But what can we say about economists themselves? Are they really too self-referential and do they tend to overestimate their role in society? On a personal note – as a policymaker and central banker – I do believe it is possible that central bank governors may pay the cost of the so-called “superiority” of economists (for instance when they are too sure of their econometric models). How will we proceed in this conference today? In-depth discussion of papers will be left to participants. However, I would like to mention the potential role that the Foundation can play to help address some important issues. First, economic analysis is definitely needed in order to sharpen policy makers’ understanding of the world. At the same time, policy makers should continuously challenge the alleged “superiority” of economists with the complexity of the real world.
For instance, I think of a paper by Freixas, Parigi and Rochet on “Systemic Risk, Interbank Relationships and Liquidity Provision by the Central Bank” published in 2000 in the Journal of Money, Credit and Banking (JMCB). In 2000, that is eight years before the crisis. And yet the paper already underlined the importance of interbank relationships in the spread of risk. Some trends and evolutions in research in economics and in the work of central banks over the last twenty years were also identified and discussed. Obviously globalization and international links have played an ever more important role in monetary and financial economics (including with the creation of the euro for instance). There were also changes in economic research, as more attention was progressively given to actual policy-making. One of the leading examples is perhaps the so-called Taylor rule, which was created to describe the actual behavior of central bankers. This allowed a much richer interaction between academia and policy makers. Changes also affected policy-making, with more attention paid to academic debates. These even influenced the very structure of central banks. Research units were put into place and developed in most major central banks, including the Banque de France, which also implemented an External Evaluation of Research (EER). Central bankers indeed realized the importance of conducting their own research activities to support policy making. Heavier use of theoretical findings and data-based analysis was made, in order for central banks to better articulate their policy actions.