When central banks make decisions about inflation, interest rates, or financial stability, they rely heavily on economic research. But where does that research come from? And whose ideas end up shaping the global conversation?
A new IREF Working Paper by Tom Bugdalle and Moritz Pfeifer takes a fascinating look at these questions by analyzing more than 330,000 economics articles and millions of citations between them. The results reveal a striking hierarchy in the world of economic research.
Home bias is alive and well
One of the clearest findings is that economists overwhelmingly prefer to cite research produced in their own country.
After accounting for differences in journal quality, publication volume, and other factors, the authors find that domestic research receives around 70% more citations than comparable foreign research.
This “home bias” is much stronger than any effect of historical colonial ties. Even in an increasingly globalized academic world, national research communities remain surprisingly inward-looking.
Central banks have become major research institutions
Many people think of central banks simply as institutions that set interest rates. In reality, they have also become major producers of academic research.
The paper shows that publications written by central bank economists receive about 17% more citations than similar articles without central bank authors. This suggests that central bank affiliation gives researchers greater visibility and influence within the economics profession.
Over the past few decades, central banks have dramatically expanded their research output. Institutions such as the Federal Reserve and the European Central Bank now rank among the world’s largest producers of economic research.
Colonial history matters less than today’s monetary system
The authors also investigate whether former colonies continue to look primarily toward their former colonial powers for economic ideas.
Surprisingly, the answer is largely no.
Countries that were once part of the British, French, or other European empires do not systematically cite research from their former rulers more often than expected.
Instead, another country dominates the citation network.
All roads lead to the United States
Former colonies are significantly more likely to cite research originating in the United States than research from other countries.
This tendency is especially strong among central bank researchers.
The pattern reflects today’s international monetary system more than yesterday’s empires. Because the U.S. dollar remains the world’s dominant reserve currency, many central banks closely follow developments in the United States. As a result, American research has become the intellectual reference point for monetary policy around the globe.
In other words, while formal empires have disappeared, a different kind of hierarchy has emerged, namely, one built around the central role of the U.S. dollar and American economic institutions.
A global hierarchy of ideas
The study paints a clear picture of the global economics profession.
Research is highly concentrated in a small number of advanced economies, particularly the United States and Western Europe. These countries not only produce much of the world’s economic research, they also receive a disproportionate share of citations.
Meanwhile, economists in developing countries remain far more peripheral within the global network of knowledge. Just as financial markets exhibit hierarchies, so too does the production and diffusion of economic knowledge.
Understanding these patterns matters because ideas influence policy. If certain countries consistently dominate the economic debate, their perspectives and policy frameworks are also more likely to shape monetary policy around the world.
Working Paper: The Geography of Central Bank Research: A Gravity Model of Citations by Tom Bugdalle and Moritz Pfeifer.
