Carlos Madeira, Banco Central

Paper: The life experience of central bankers and policy decisions

Abstract: Using a hand-collected dataset with biographical information on central bank governors and board members across 212 countries, I obtain experience-based forecasts for GDP growth and inflation based on an adaptive learning model estimated from their lifetime macroeconomic data. I show that life experience influences the monetary policy rates, with heterogeneity by central bank independence and central bankers’ treasury experience. PhD education, studies abroad and professional experience in foreign countries do not seem to influence policy rates. Furthermore, life experience influences the tone of speeches for monetary policy, financial stability and climate concerns. Weather disasters experience reduces climate concerns and NGFS membership.