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Press, Journal Article

33

2 Monetary policy and economic education

But I'm not just an economist - I'm also a central banker. In this capacity, I have a special

interest in communicating with audiences beyond industry professionals.

This is because the successful functioning of any central bank hinges heavily on the support

of the general public. Or, as Otmar Issing put it, "Ultimately, every society has the inflation

rate that it wants and deserves."

It is without a doubt easier to implement a stability-oriented monetary policy when the

general public holds monetary stability in high regard. What's more, the stronger the public's

support for a central bank's stability-oriented stance and the greater the confidence it enjoys,

the greater its level of independence becomes.

Appreciation of monetary stability is, of course, not to be confused with detailed knowledge

of the mechanisms of monetary policy, although there is evidence to suggest that a person's

appreciation increases in parallel with the knowledge he or she has about the way in which

these two factors interact.

A number of studies indicate that economic education has - to put it diplomatically - some

room for improvement. The Bundesbank has therefore expanded its economic education

programmes in recent years.

By using educational materials and organising various types of events, we want to improve to

the best of our ability the general public's understanding of monetary and foreign exchange

policy issues. For example, our Regional Offices provide teacher training, visit school groups

and organise public lectures under the motto "Forum Bundesbank". The feedback that we

have received on these initiatives has been very positive.

I myself meet once a year with teachers and once with pupils. Time and time again, I see

when young people visit the Bundesbank that they are very interested in our work and ask

intelligent questions.

We should, of course, be aware that the impact that such measures can have is limited in

terms of both breadth and depth. Such was the account recently given by the senior business

editor of the

Frankfurter Allgemeine Zeitung

concerning her own offspring: "It is a positive

thing that [the Bundesbank] goes into schools to raise awareness about monetary stability and

to provide insights into the secrets of interest rate policy. It really is never too early to start

tackling such topics in times such as these. However, it should be under no illusions as to the

success of its efforts. My child took precisely one term away from the talk given by a

Bundesbank representative to a year 12 class: marginal lending facility."

Incidentally, this technical term is even on the sixth form curriculum in Bavaria. That being

said, it is also clear that the jargon that we have become accustomed to as central bankers

should not detract from the essentials.