Central Banking workshop draws global participants

by Rebecca Lindell

For one week in September, the James L. Allen Center became a "state-of-the-art monetary policy laboratory" as two dozen international central bank researchers gathered to discuss the latest trends their field.

Hosted by the Kellogg School, the Advanced Central Bankers Workshop drew participants from Europe, Canada and the United States. For many, it was a unique opportunity to integrate cutting-edge research on international finance and monetary economics into their policy work.

"The inspiration for the workshop came from the explosion of academic research that is relevant to monetary policy," said Sergio Rebelo, the Tokai Bank Distinguished Professor of International Finance at Kellogg and one of the conference organizers. "We are exposing central bank economists to the research frontier in topics that range from model building to forecasting techniques."

Compelling discussions during the week included the role of risk and uncertainty in monetary policy decisions. Participants were also curious about how to transform leading research into tools useful for policy makers.

The conference gave attendees the opportunity to do just that through practicum sessions during which they used faculty-developed tools and software to generate information relevant to the conduct of monetary policy. "In effect, we converted an Allen Center classroom into a state-of-the-art monetary policy laboratory," Rebelo said.

The workshop also featured lectures by Rebelo and Northwestern University economics professors Martin Eichenbaum and Lawrence Christiano, as well as other top scholars in the field.

"The conference was a great success," said Stefan Palmqvist, head of the applied research division in the monetary policy department of the Swedish central bank "It was well-organized, with a great venue and an excellent social program. The mix of lectures and assignments, in the form of easy-to-follow yet very insightful tutorials, gave a deeper understanding of the material taught. But by far the most important, the lecturers were extremely enthusiastic about their work, which made their lessons engaging and fun."

Most of the conference attendees work in the research departments of their nation's central bank. The information they produce is an important input into monetary policy decisions.

"The kinds of models we are discussing are now being used at the European Central Bank, the Board of Governors of the Federal Reserve, the Bank of England and in many other central banks," Rebelo said.

This was the second year for the workshop, which was organized by Northwestern University's Center for International Economics and Development. "We are hoping that this will become an annual event and that it will help make Northwestern University a focal point for research on monetary economics and international finance," said Rebelo, who with Eichenbaum is the center's co-director.