The educational and occupational background of central bankers and its effect on inflation: An empirical analysis

We test the hypothesis that the inflation preferences of central bankers depend on their educational and/or occupational background. In a panel data analysis for the euro area and eleven countries since 1973, we explain inflation either by the weights with which the educational and occupational characteristics of the 391 council members were represented in the various central bank councils or by the education or occupation of the median council members. Control variables are added. Our most robust result is that former members of the central bank staff prefer significantly lower inflation rates than former politicians do.