TESTING TIMES FOR CENTRAL BANKS – IS THERE ROOM FOR AUSTRIAN IDEAS AT THE TOP TABLE?

Central banks are facing an unprecedented test in the wake of the credit crisis. We briefly outline prevailing theoretical frameworks and argue that central bankers effectively have a choice between three separate frameworks: Vienna, Cambridge and Chicago. Despite Austrian economics being the least acknowledged we survey increasing exposure in mainstream media, suggesting a role for a more explicit use. We provide implications for policy‐makers and claim that Austrian ideas have a place at the top table of policy debate.