Falling down the Jackson Hole

Sundance for economics set means little in real world

Like many a tourist destination, the small town of Jackson, Wyo., swells during vacation season, as millions flock to the nearby Grand Teton and Yellowstone national parks.

During one week in August, however, the area swells in a different way — by IQ — as some of the world’s smartest folks make the pilgrimage to the annual Jackson Hole Economic Policy Symposium put on by the Federal Reserve Bank of Kansas City. (Don’t ask me why the thing isn’t held in Missouri.)

This year’s symposium began on Thursday, attracting about 120 brainiacs from the Fed, central banks, government and financial firms, as well as media. It’s as close as most of these folks get to celebrity status. Think of it as Sundance for the economist set, complete with star turns.

Representatives from 40 central banks, including Bank of Canada governor Stephen Poloz, are attending, but the real headliners are U.S. Federal Reserve Chair Janet Yellen and European Central Bank head Mario Draghi, both of whom speak on Friday. Their remarks will be closely watched, scrutinized and dissected … and will probably not amount to very much in the real world.

This isn’t a criticism. The whole point of Jackson Hole is for policymakers to exchange ideas in an open forum, and that’s no doubt a valuable exercise. But those expecting clear solutions to the conundrum central bankers face are likely to be disappointed.

Yes, there will be the requisite searching of Yellen’s and Draghi’s words for clues as to what’s coming down the monetary policy pipeline, and those may be revealing.

Draghi might offer hints about the ECB’s level of commitment to quantitative easing (a.k.a. bond buying), given that European economic growth seems to be on the upswing and the euro has been appreciating.