The Strange Business of Central Banking

Central banking is a weird business: Small groups of unelected officials affect the fates of billions. One particular concern is that policies meant to benefit everyone might help some more than others. It's a topic that occupied a good deal of the discussion this morning at the annual confabof academics, traders, and central bankers in Jackson, Wyoming, hosted by the Federal Reserve Bank of Kansas City.

Monetary policy makers usually don't worry about the distributional impact of their decisions. Instead, they prefer to focus on big headline numbers. Just a year ago, Federal Reserve Chairman Ben Bernanke was arguing that the Fed's bond-buying had lowered borrowing costs enough to boost the economic growth by 3 percent and add 2 million jobs. His analysis was based on a paper by, among others, the president of the Federal Reserve Bank of San Francisco.