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How Central Banks Learn From Their Own Policy Mistakes
Description
Central banks in advanced economies have spent the last two decades making policy errors — and then systematically studying them. In this episode, Lucas and Luna walk through three concrete cases: the Bank of Japan's early 2000s quantitative easing that took a decade to exit, the European Central Bank's 2011 rate hikes that deepened the eurozone crisis, and the Bank of England's 2022 gilt market intervention after a fiscal shock. They explain how each central bank built formal review processes — the Bank of Japan's 'Comprehensive Assessment' in 2016, the ECB's post-mortem on its 2011 tightening, and the Bank of England's Financial Policy Committee framework. Listeners will learn one specific mechanism central banks now use to avoid repeating history: the structured post-crisis review. No abstract theory, just the actual institutional changes that came from real mistakes.