Embracing the views and expertise of citizens is increasingly common in other disciplines. “Citizen Science” draws on the time and expertise of the general public to solve problems as diverse as spotting star and galaxy formations and forecasting the weather. 82  As well as helping solve these problems, Citizen Science  increases public interest and understanding of science. What better time for central banks to begin enlisting the help of some Citizen Economists. Conclusion  Central bank communications have come a long way. When pressed by a Parliamentary Committee in 1930 to explain the Bank’s actions, Montagu Norman replied: “Reasons, Mr Chairman? I don’t have reasons, I have instincts”. The Bank’s Chief Economist of the day was given similarly short shrift by Norman: “You are not here to tell us what to do” he scolded “but to explain why we have done it.” How things change. Central banks are public institutions, put on earth to serve the public. As the public’s norms, preferences and demands shift, so too must central bank practices. That is exactly what has happened over many years. The evolution-cum-revolution in central bank communications practices over recent years came in response to new circumstances and new responsibilities. It has delivered significant benefits. But the past few years have seen further societal and technological shifts, at a time when central banks having been bearing a heavier policy load than ever previously. As trust and technology has changed, so too must central banks.

Although financial globalisation has brought about improved macro-economic efficiency, via a more efficient allocation of resources and capital, liberalised capital flows, increased competition on financial markets, increased transparency (apart from the recent ENRON episode! ), changes in asset prices have also become more pronounced and have experienced clear misalignments or deviations from their “equilibrium” levels. Moreover, credit seems to have played a greater role in asset prices fluctuations. Initially observed during the “speculative bubbles” of the 1980s and early 1990s, this trend has persisted, if not amplified. Several factors may explain these recent and abnormal patterns in asset prices. I shall give a few examples. ·  First, "short-termism": some market participants may have become more inclined to be mostly preoccupied with their short-term results. This trend might result, in particular, from growing pressure to yield good results immediately. However, these results are not necessarily sustainable. Marking-to-market financial products may also have contributed to this widespread focus on immediate financial performances. This emphasis on short-term performance may result in increased volatility in the price formation process: the shorter the investment horizon of markets participants, the bigger the impact of any new information on prices. ·  Second, herding or mimetic behaviour: mimetic behaviour is of course by no means a new phenomenon on financial markets. Technological developments on markets may however have gradually reinforced this type of behaviour, as participants are under increasing pressure to follow their peers through matching the performance of a benchmark.