Central Bankers play test-match cricket under trying conditions

I was reading this piece from Tamal Bandyopadhyay:

In cricketing parlance, this is a not a dream pitch to bat on. With the inflation rate at a 13-year high, capital flows drying up and the rupee weakening against the dollar, the job of India’s chief money manager is not going to be easy.

It just struck me. When is it easy? Just a few months back we could reverse this entire thing with the same end

With the inflation rate expected to rise, capital flows rising, the rupee appreciating against the dollar and the economy moderating, the job of India’s chief money manager….

It is still not easy.

Though it was being felt that Central Banker’s job is not exciting and Mervyn King even remarked it as boring. Obviously all this was in backdrop of the Great Moderation when Central bankers felt that lower volatility in output and inflation was here to stay and central banks had little more to do.

We now know all this was nothing but true and Great Moderation is followed by Great Disruption with heightened volatility in output, inflation, financial markets etc. You name it and we have it.

I have a different analogy for Central banks and Cricket. The Central banks play a test-match in trying conditions – on slow turning wickets (Sub-continent, West Indies) where ball stays low and starts turning viciously on 4th/5th day, or in England where the ball swings substantially, or on pacy wickets like those in South Africa, Australia (Perth). First situation is Great Moderation, second and third are like today’s times where swing and pace conditions can unsettle both the sides. Those Central Bankers and Cricketers which can play under all conditions are dubbed as great/benchmarks/ideal, rest are simply known as players.

So far few Central Banks/Bankers were considered as greats, but as they moved from sub-continent to Australia their technique is being questioned. 🙂

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