The Economic Affairs Committee of the House of Lords has produced its report on the Bank of England. Correctly, it is critical of the Bank, but it could have been much more so. As expected, the Bank is said to suffer from “groupthink” and the Treasury origins of its senior staff are highlighted as a weakness.
But there is nothing wrong with groupthink, if the members of the group believe in the right theories. In fact, groupthink would be a positive merit if there were a single right theory and everyone accepted it. The Bundesbank seems to me to have done a pretty good job between 1957 and 1999, and arguably its staff thought in much the same way. As far as I am aware, every physicist endorses the laws of gravity and every physicist is therefore subject to groupthink. I have argued consistently in (what is now) a depressingly long career that the essence of well-organized macroeconomic policy is:
