Marc-Andre Pigeon (University of Saskatchewan)
In the early 1990s, the Bank of Canada began to emerge from the shadows, shedding the secretive practices that had long characterized its (and other central bank) communications practices; spawned best-selling books with titles like “Secrets of the Temple” in the United States; and created the conditions for politicization. Over time, the Bank of Canada (BoC) became a leader in modernizing its communication practices, publishing ever-increasing amounts of information about its inflation target while engaging in active listening to a variety of voices, not just academics. Anchored in the “expectations” model of inflation, the BoC began to see its communications practices as core to its mandate: if people believed inflation would anchor around 2%, behaviour would follow in the form of contract negotiations, pricing, and financial returns. It seemed to work: inflation hovered around the target, monetary policy politicization became taboo, and central bank independence was celebrated as good macro-economic management. But recent supply chain disruptions, bouts of inflation, geopolitical turmoil, accelerating climate change, and renewed politicization have raised questions about the effectiveness of the old ‘talk’ strategy. In this paper, we document and critically examine the Bank of Canada’s evolving communications practices by embedding the concepts of input and output legitimacy and policy conventions in a cybernetics framework. We argue that without a stable macro-economic context, the continued use of the same ‘talk’ strategies will provoke a new round of politicization and crisis.