To raise our profile and exploit the research to the maximum

Olivier Garnier joined the Banque de France in September 2017 as Director General Economics and International Relations. He started his career at INSEE and then held various positions within the French Finance Ministry, the US Federal Reserve Board and the banking group Société Générale. Olivier Garnier is a member of the Scientific Advisory Board of the French Financial Markets Authority. He was a member of the French Prime Minister’s Economic Advisory Council from 2002 to 2012. He is a graduate of École Polytechnique, École Nationale de la Statistique et de l’Administration Économique (ENSAE), and the University of Paris-Dauphine. He has lectured in economics at various French and foreign academic institutions.

1. After spending several years working with different institutions, you joined the Banque de France in September last year as Director General of the DGEI. Could you give us a brief summary of your (professional) career?

The common denominator throughout my career is that I have always worked as an economist – although in different positions and with different institutions: INSEE, the French Treasury, the US Fed, ministerial offices and the banking sector. However, regardless of the sector, economist jobs share some common characteristics. In particular, in the policymaking arena as well as in the private financial sector, the role of the economist is to remind us that there is no such thing as a free lunch, and to make recommendations based on a cost/benefit or risk/reward analysis. To paraphrase Frédéric Bastiat, the French 19th century economist, the contribution of an economist is to pinpoint the “unseen” rather than the “seen”, in other words to identify indirect effects, externalities or things that are counterfactual.

How would you describe the research and analysis activities of a central bank as opposed to your experience of work in other institutions (and in particular in the banking sector)?

In my opinion, a central bank’s research and analysis needs to combine two different dimensions: on the one hand it should help to advance economic knowledge and methods; on the other it should serve to guide central bank policymaking and, more broadly, to inform public opinion on economic and monetary issues. It is this dual objective that sets it apart from purely academic research and from the analysis conducted by other institutions, such as banks.

3. What role should research and analysis play at the Bank?

Carrying on from what I’ve just said, the Bank’s research and analysis work should be based on two key pillars: excellence in research and influence in those economic, monetary and financial issues falling directly or indirectly within the Bank’s remit.

4. Do you think the Banque de France should focus more on areas of research that are relevant to the Eurosystem?

We are currently working on this as part of the Bank’s Ambitions 2020 transformation plan. We cannot and should not cover all areas of research. We need to concentrate on a dozen or so areas of excellence covering subjects that are unavoidable for a Eurosystem central bank, and selected areas of expertise where we think we have – or want to develop – a comparative advantage.

5. In general, what is your opinion of the research carried out at the Banque de France or at other European national central banks?

Thanks to the work of my predecessors over the past decade, the Bank’s research is now recognised for its excellence. On the basis of articles published in academic journals, we are ranked among the top central banks in Europe. However, we shouldn’t make the mistake of being complacent, as the competition is getting tougher all the time. We need to keep recruiting high calibre researchers, encouraging excellence and working with the best research institutions. We also need to raise our profile and exploit this research to the maximum. This has to be done through all our communication channels (working papers, Rue de la Banque, blog, conferences, Governors’ speeches, etc.), and by strengthening our presence and influence in policy discussion forums, both domestically and internationally.

6. Should the Bank open itself up more to academia or cooperate more with other central banks (in the euro area, in non-euro area European countries, in the United States, etc.)?

The Bank is already very much open to the academic world, and that’s a good thing. The goal isn’t so much to keep establishing new partnerships as to get the most from our existing ones, review them regularly and give them new impetus where needed.

As regards cooperating with other central banks, we already have numerous close ties, in particular within the Eurosystem. But there’s probably room to develop them further.

7. In your opinion, what are the main challenges for research and analysis (at central banks) over the next four to five years?

I can see at least two challenges, which are very different in nature.

The first concerns the future “new normal” in monetary policy. We expect this “new normal” to be very different from what we had before the crisis, but we don’t yet know exactly what it will be.

The second relates to the digital revolution. First, over the next five years this will probably result in further and more radical changes in the economy, and will thus force economists to reconsider some of their analyses and models. Second, it will also throw up new areas of research (as seen already with the question of whether central banks should start issuing digital currencies). Last but not least, it might transform the way economists carry out their research and analysis. A lot of things could change: the data used, the tools used to process that data, the way work is organised, methods of collaborating and exchanging with other researchers, and so on.

8. What direction should the Bank take with its research and analysis? Should it become more “policy-oriented”? Should it provide clearer and more active support for policymaking? Should it inform the main national and international economic policy debates (in a general sense)?

I don’t think it is relevant to draw a distinction between “fundamental” research on the one hand, and work to inform policymaking on the other. The ultimate – although not necessarily immediate – goal of a central bank’s research should undoubtedly be to inform debates and policymaking. And work to inform policymaking should necessarily be based on research.

To achieve this synergy, one thing is vital: to try, wherever possible, to anticipate the policy issues and debates of tomorrow rather than simply reacting as they arise. This capacity to anticipate is a prerequisite for research to remain influential.

9. With regard to the dissemination of our research and analyses, should the Bank look for new channels of communication and find ways to better target its audiences?

I think it’s important to be agile and adaptable, as modes of communication are evolving constantly and at an increasingly rapid pace. Printed research has all but disappeared, and email distribution is being replaced by social networks. Even social networks may have become obsolete in a few years.

Our principal challenge, therefore, is how to increase the audience for our research. Our work is already well known and recognised in research communities (Peer-to-Peer communication), but there is room to increase its visibility and influence in other spheres (think-tanks, policymakers, journalists, etc.). This means using more appropriate communication channels, as we can’t stick only to the traditional “working paper” format. The launch of our blog is a positive development in this respect, although we still need to bring it to a wider audience, notably using social media. Visibility can also be enhanced by active participation in events open to the general public, such as the annual Jéco (Journées d’économie) in Lyon or events promoted by the regional offices of the Bank.


Updated on: 04/16/2018 17:02