Joachim Nagel: El Economista
Speech by Dr Joachim Nagel, President of the Deutsche Bundesbank, in honour of Mr
Pablo Hernández de Cos, Governor of the Bank of Spain and recipient of the
Echegaray Prize, Madrid, 2 November 2022.
* * *
1 Introduction
Ladies and gentlemen,
Today we are celebrating the award of the Echegaray Prize to an outstanding
economist and central banker.
Pablo, It is a great pleasure for me to speak at this wonderful event in your honour here
in Madrid. I could certainly talk for a long time about all your achievements and merits,
but my time is limited, so I will have to remain brief.
2 Life path and achievements
Allow me first to say a few words about you, your life path and your major achievements.
Pablo Hernández de Cos was born on January 20, 1971. His family originates from
Santander, a beautiful region in the North of Spain. This region is, I guess, more green
but less sunny than average for the country. He graduated in economics and business
administration at the University College of Financial Studies in Madrid in 1993 and in
law at the National University of Distance Education the following year.
His career as a central banker started in 1997, when he joined the research division of
the department of monetary and financial studies at the Banco de España as a senior
economist. A year later, he moved to the economic policy analysis division at the
department of economic analysis and forecasting, where he stayed until 2004. As you
can see, Pablo is familiar with the groundwork carried out by economists at central
banks. He was one of the economic experts that central banks are famous for. Perhaps
I am stressing this point because I believe that getting to know a central bank from its
heart is a highly valuable experience.
In this period, Pablo not only worked as a senior economist at a central bank, he also
got his PhD at the same time. A great achievement! Meanwhile, he also opened a
chapter in his life that someone from Frankfurt like me is especially pleased to talk
about: In 2000 he came to this city for the first time as a country expert at the ECB,
staying for a few months.
After receiving his doctoral degree, he deepened his Frankfurt connection further and
became an advisor to the Executive Board of the ECB in 2004. His second Frankfurt
experience lasted much longer, spanning three years until 2007. His first child was even
born in Frankfurt. This gives me reason to hope that he can look back on happy
memories of this city when he now visits it to attend the meetings of the ECB Governing
Council. Whether or not he grew fond of Frankfurt, his work as an advisor to the
Executive Board of the ECB seems to have been an important step towards new tasks
after he returned to Madrid.
In 2007, he became the head of the economic policy division at the department of
economic analysis and forecasting. Eight years later, in 2015, he was appointed as the
director general of economics, statistics and research. Mind you, he simply skipped the
usual intermediate step as the head of a department. Finally, in 2018, only three years
after becoming the director general of economics, statistics and research, he was
appointed as the Governor of the Banco de España.
3 Important moments and qualities
Pablo, Looking at your CV make me feel humble. Though you are five years younger,
you took four years fewer to reach a similar position. Furthermore, your career is more
straightforward than mine because you never left the central bank sphere. Of course,
you spent some years in Frankfurt but by then the Banco de España was already part
of the Eurosystem.
Cleary, your outstanding career does not fit with a popular myth about central bank
governors, who are supposed to have extensive ties with the financial system and the
political world. Instead, you have a deep connection to the world of macroeconomic
models and statistical methods. This is the perfect bedrock for a high level of
independence - an essential quality in a central bank governor.
You are an excellent researcher and economist. You have written more than 40
research publications, among them more than a dozen publications in refereed journals.
Here too you have been very straightforward and consistent. Most of your publications
deal with fiscal policy. To my knowledge, this is also true of your doctoral thesis, which
is about privatisation issues.
In particular, you are the author of one of the most sophisticated works on the future of
1
the social public pension system in Spain. In this work, together with Juan F. Jimeno
and Roberto Ramos, you analysed different scenarios for the Spanish pension system
up to the second half of this century.
And you have chaired the Eurosystem's Working Group on Public Finance for five
years. It seems clear that you are obsessed with fiscal policy issues. Someone could
argue: "He is not a "classic" central banker; a true central banker should be obsessed
with inflation and monetary policy issues." However, Mervyn King, the former governor
of the Bank of England, claimed the opposite. He said: "Central banks are often
accused of being obsessed with inflation. This is untrue. If they are obsessed with
anything, it is with fiscal policy."2
In fact, discussions about fiscal policy issues are often initiated by central bankers. That
should not come as a surprise, since a sound fiscal policy provides a necessary
foundation for a successful and independent monetary policy.
Given your research profile, it is very fitting that you are receiving an award named after
the important Spanish fiscal policymaker José Echegaray, who, in addition, reformed
the Banco de España comprehensively in the nineteenth century. José Echegaray was
born in 1832 in Madrid. He was appointed as Finance Minister in 1868 and in 1905. He
is also well-known for his literary career.
However, it would be very unjust for me to emphasise only your professional skills and
achievements, Pablo. You are not only an excellent economist and central banker, but
also a wonderful and versatile person. In your free time, you have a deep interest in and
knowledge of history, particularly the history of the renaissance period in Europe. You
also have an in-depth knowledge of art and literature. This too makes you a perfect
match for the Echegaray Prize, since José Echegaray was not only a finance minister,
but also an outstanding dramatist, awarded the Nobel Prize in Literature.
To sum up, I think that everyone working at the Banco de España can be proud to be
led by you, Pablo.
4 Conclusion
For my part, I feel very fortunate to be able to work with such an outstanding person on
the ECB Governing Council as well. As central bankers, we are currently going through
very challenging times. Inflation was believed to be dead by many, and for many years.
Now it is back. We have to fulfil our mandate of safeguarding price stability in Europe.
That is what everyone is expecting of us - not only economists, politicians and market
participants but ordinary people too.
Pablo and I both share a lot of views on various economic issues - particularly on our
task of bringing inflation back to target. I look forward to continuing this exchange of
views - on inflation, monetary policy, fiscal policy or on history and the lessons it holds
for today's problems.
1
De Cos, P. H. and Jimeno, J. F. and R. Ramos (2017) The Spanish Public Pension
System: Current Situation, Challenges and Reform Alternatives, Banco de Espana
Occasional Paper No. 1701.
2
King, M. (1995), Commentary: Monetary Policy Implications of Greater Fiscal
Discipline, in Budget deficits and dept: Issues and options (pp. 171-183), Federal
Reserve Bank of Kansas City, Jackson Hole Symposium.