Andrew Haldane: Market power and monetary policy

Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at "Changing Market Structure and Implications for Monetary Policy", a symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, 24 August 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The topic for this panel is the link between developments in product markets and monetary policy. It is a great one. A lot of attention has been paid by central bankers over recent years to the relationship between labour markets and monetary policy (for example, Yellen (2014) and Constâncio (2017)). And rightly so. The relationship between monetary policy and product markets has, by comparison, been the road less travelled.

Labour markets have been subject to big structural shifts over recent years, including the secular fall in the degree of worker unionisation in a number of industries (for example, Schnabel (2013)), the emergence of the so-called "gig economy" (for example, Taylor (2017) and Katz and Krueger (2017)) and secular rise in the degree of globalisation and automation in the workplace (for example, Brynjolfsson and McAfee (2014) and Acemoglu and Restrepo (2018)). Each of these shifts has led to a change in employment patterns and tenures and in workers' bargaining power.