© Reuters. FILE PHOTO: European Central Bank (ECB) President Christine Lagarde speaks to reporters following the Governing Council’s monetary policy meeting at the ECB headquarters in Frankfurt, Germany, January 25, 2024. REUTERS/Kai Pfaffenbach/File Photo
FRANKFURT (Reuters) – European Central Bank Christine Lagarde said on Thursday she hoped to join the “tribe” of professional economists that she criticised only a few weeks ago for being too insular.
The ECB chief, a lawyer by training, appeared to be extending an olive branch to a profession that makes up a significant share of the central bank’s own staff and its key audience when it sets monetary policy.
“My aspiration is to become a member of the tribe as well one day,” she told the European Parliament. “I have huge respect for those who are members and I value their work every day and I couldn’t do without them.”
She was responding to praise by Paul Tang, a Dutch member of the European Parliament for the Socialists and Democrats and a trained economist, who commended her “for not always listening to the tribal scientists and have a broader perspective”.
This was a reference to comments made by Lagarde in Davos last month, when she said “many economists were actually a tribal clique … who don’t go beyond that world because they feel comfortable in (it)”.
She referred to research showing that economists, and especially men, tended to quote each other.
The comments were highly unusual for a central banker, a role that is normally associated with the pinnacle of the economic profession.
A survey of ECB staff ran by a trade union showed a majority of employees thought Lagarde was not the right person to lead the institution, with several citing her lack of a formal economics training as a reason. An ECB spokesperson said the survey was flawed.
The economic profession has been the subject of waves of criticism since the global financial crisis of 2008, with even the late Queen Elizabeth questioning why no one saw it coming.
The bout of inflation over the past two years provided fresh ground for soul-searching, including by the ECB itself.
The central bank for the 20 countries that share the euro has started polling companies to get a better sense of the reality on the ground and has lately developed an artificial intelligence model to complement its human-made forecasts.
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