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Economy of Words

Communicative Imperatives in Central Banks

Economy of Words

Communicative Imperatives in Central Banks

Markets are artifacts of language—so Douglas R. Holmes argues in this deeply researched look at central banks and the people who run them. Working at the intersection of anthropology, linguistics, and economics, he shows how central bankers have been engaging in communicative experiments that predate the financial crisis and continue to be refined amid its unfolding turmoil—experiments that do not merely describe the economy, but actually create its distinctive features.
Holmes examines the New York District Branch of the Federal Reserve, the European Central Bank, Deutsche Bundesbank, and the Bank of England, among others, and shows how officials there have created a new monetary regime that relies on collaboration with the public to achieve the ends of monetary policy. Central bankers, Holmes argues, have shifted the conceptual anchor of monetary affairs away from standards such as gold or fixed exchange rates and toward an evolving relationship with the public, one rooted in sentiments and expectations. Going behind closed doors to reveal the intellectual world of central banks,Economy of Words offers provocative new insights into the way our economic circumstances are conceptualized and ultimately managed. 


“This remarkable ethnography of monetary policy making by central bankers, and the academics with whom they engage intellectually, sets a new standard for the anthropology of finance. Up to now, we have lacked a careful detailed account of how economic facts are performed rigorous and empirical enough to convince those whose intellectual propensities lie elsewhere. Economy of Words is such a book. The weight of the evidence is truly overwhelming, and the breadth of the ethnography, both in the range of central banks the author has accessed and the range of materials and informants—from academic theories to policy makers to lower level data collectors to economists to the history of economic thought—is breathtaking. The political and policy implications of Holmes’ claims concerning the relationship between central banks and their publics will make this one of the most talked about books of the year. ”

Annelise Riles, author of Collateral Knowledge

“This brilliant book tells us how and why central bankers have learned to ‘talk to markets.’ For only by convincing markets can they validate their economic forecasts and justify their policy prescriptions. In this eye-opening account markets are discursive formations and social conventions, not products of nature. Based on careful empirical research, analytical rigor, and intellectual imagination, Douglas R. Holmes challenges and enriches his reader on every page. Opening new avenues for research and understanding, this book will become required reading for all serious scholars and students of political economy.”

Peter J. Katzenstein, Cornell University

“Who would have thought that central banks could become champions of humanities disciplines—of language and communication? Douglas R. Holmes insightful new book is the first to examine in detail the global shift from an era when central banks never said anything, to their mystifying mumblings during the 1980s and ’90s, to their targeting audiences and making policies with the full employment of the power of language. J. L. Austin and John Searle could not have imagined a more far-reaching application of doing things with words. Easily the best book on what is happening in global monetary policy and financial stability.”

Karin Knorr Cetina, University of Chicago

“Douglas R. Holmes has performed a uniquely important service by probing the professional intimacy of the banking world. He shows us that economists, despite their claims to scientific precision, often resemble anthropologists reporting from the field.  But, as he demonstrates, they also deploy their narratives to draw their publics into the construction of self-fulfilling prophecies, thereby refashioning economic dynamics to meet each new contingency as it arises.  No one who reads this book will come away still believing that language is immaterial; Holmes’s elegantly crafted, deeply informed, and wickedly critical analysis demonstrates how the economists’ rhetoric and narrative strategies shape, rather than follow, the realities of today’s wildly unpredictable global economy.”

Michael Herzfeld, Harvard University

Table of Contents

Preface: Backstories
Chapter 1. Creating a Monetary Regime
Chapter 2. Communicative Imperatives
Chapter 3.  Markets Are a Function of Language
Chapter 4. Apprehensions
Chapter 5. Kultur
Chapter 6. Temporality
Chapter 7. Simulations
Chapter 8. Inflationary Tempest
Chapter 9. Liquidity-Trap Economics
Chapter 10. The Overheard Conversation
Chapter 11. Intelligence
Chapter 12. Representational Labor
Chapter 13. Manifesto for a Public Currency
Chapter 14. Totality of Promises

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