In this talk, Benjamin Braun (London School of Economics) will present findings from a collaboration with Monica DiLeo and Jérôme Deyris, which examines the political economy of central bank independence through the lens of distributional outcomes. At the core of the debate is whether independent central banks expand overall economic prosperity or disproportionately favor capital. Central to this inquiry is the labor market—both in terms of how central bankers conceptualize inflationary pressures and how monetary policy transmits through the economy.

Focusing on the Federal Reserve as a pivotal test case, the study applies LLM-assisted text classification methods to the full corpus of Fed communications from 1970 to 2020. This analysis measures policymakers’ understanding of labor’s role in driving inflation, revealing a robust negative relationship between unemployment rates and the salience of labor as an inflationary factor. Notably, this dynamic emerges in the internal deliberations of the Federal Open Market Committee (FOMC) but is absent from public speeches. 

By uncovering this divergence, the study demonstrates that, contrary to the Fed’s dual mandate, policymakers did not construct a mere ‘rhetorical Phillips curve.’ Instead, the findings point to a deeper ‘fear of full employment.’ In doing so, the project contributes to broader debates on central bank independence, the distributive politics of monetary policy, and the contested role of labor in macroeconomic governance.

Benjamin Braun is an assistant professor in political economy whose research focuses on finance’s role in capitalism, macrofinance, and the green transition. His work has appeared in leading journals such as Perspectives on Politics, Socio-Economic Review, and Review of International Political Economy. He is currently authoring a book on asset manager capitalism, forthcoming with Chicago University Press. In addition, he serves as an associate editor for Competition & Change and leads the research project Central banking in hard times as a fellow at the Hertie School in Berlin. Prior to joining the LSE, he was a senior researcher at the Max Planck Institute in Cologne and held fellowships at Harvard University and the Institute for Advanced Study in Princeton.