The Indicator from Planet Money - Jamaican Monetary Policy: Behind The Music

Jamaica's Central Bank has a unique way of explaining its policies: Reggae music videos. The Indicator talks with the Central Bank about why they've taken this unique approach.

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News is pretty rough right now. But used to be just you know, scrolling through headlines is now called Doom scrolling, but the other day as I was scrolling I saw a bit of light in August. It was a press release from the Central Bank of Jamaica, which is that sound like a light in all the Doom, but bear with me it was a music video explaining inflation. Definitely not the typical thing. You see from a central bank when inflation stable and predictable. That's the way to Eden Amnesia. This is the indicator from Planet Money. I'm Stacey Vanek Smith today in the show. We call it the Central Bank of Jamaica to ask about there inflation music video explained her what's going on. What are they trying to do? And why now?

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So we called it the Central Bank of Jamaica to ask what was going on with their music video and they put us in touch with Wayne Robinson and Economist and Deputy Governor at the Central Bank of Jamaica Helloween. You're here with us now. Thanks for joining us first. Very basic question. What is the Central Bank of Jamaica do okay. Have you heard about the fit the escrip? I'm sure you have well, we are the equivalent of the US fed in Jamaica.

Responsible for overseeing the financial system are also responsible for monetary policy and the issuing of notes and coins. So I was on Twitter kind of scrolling through very distressing stories and I saw something that you posted on the Jamaican Central Bank and it was like it was all these dancers and it was like it was like a music video think you are speaking to her.

Okay, the government took a policy decision.

As part of its economic reform program.

Transitioning or monetary policy framework on our and a monetary policy strategy to what is called a full-fledged inflation targeting strategy this innocence.

Is that like that is the kind of language I expect out of a central bank, right? I mean, it's like very it's very technical and measured. How do we break down? Just what I said to you in language that every single individual understand and can appreciate.

That was a challenge. We give to our PR department and one of the things if you know Jamaica, you know that we're at country that is renowned and we love music and the PR department decided to actually try to capitalize on this to try to tell the story in a language that everybody speaks and everybody understands and that languages is music particular reggae music music. Yes, and it's the what is it the lowest stable and predictable inflation really high that means prices are going up a lot and and people get really scared cuz they're saving starts to be feel less valuable.

So then they will then cut back on their Investments as well. So that will affect employment sand and growth. I feel like for a long time at least I mean there was sort of an effort made to be as cryptic as possible the idea of clearly communicating monetary policy so that everyone can understand like that's actually not that's pretty new. What a number of central banks. You know, how about you recognize this imperative and the number central banks have tried to change their approach but I think coming out of the global financial crisis where one meter challenge has been counted was that our traditional tools of monetary policy. I think right across the globe central banks recognize that we have to augment those traditional tools and in a context where expectations where the market Expo

Deshawn's and With Honor man's expectations really matter a lot that central banks came to the realization that they have to then adjust how they communicate in order to affect those very same expectations with which are important very stuffy very cryptic. And even though there has been some movement away from that like you guys have just gone like totally in the other direction. I mean, this is like the students like exuberant and fun of people are dancing and it's just like so it's like the opposite of everything. I supposed to eat with central banks. First thing that we needed to do was to grab people's attention.

Because I could say economics monetary policy is very boring is SSB very stuffy. So we had to radically change that but I said the first step was to grab attention and then the next phase has been with the Ben try and break down down the issues to do that. We have to do something radical central banks really try to do it's like very important for them to be taken seriously cuz there's a lot of trust that is necessary in a banking system. Was there any worry that like this might make people trust the Central Bank last that it might seem like less serious note that does not concern really because I recognized with a need to connect to people

You can't build trust unless you create a bridge unless you make that connection.

I'm so this was the main strategy that is fraught with necessary to make that connection in order to build a truss.

Do you think other central banks should take a page from you guys and be part of more fun more accessible or almost but the precise precise method would be a function of the audience that they are targeting. Are you in are you in Kingston right now? Are you working from home? Are you going to the office now will a combination some days are diamonds some days. I I work from home.

What are the strangest thing is that coming into the office? You're virtually unloaded here? Because we have Minnie Mouse stuff that comes in. Do you miss your co-workers? Oh, yes. Comes about by this direct social interaction, you know, and I know we are thinking of ways in this virtual world. Thank you so much for making the time. I so appreciate it and is the production of NPR?

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