Central bankers are widely seen as the supermen of the economic world. They have the most power to influence the world economy for good or bad. But a closer examination would show their influence is not as great as it seems.Critics of central bankers still generally hold to the view that the world’s financial bureaucrats are extraordinarily powerful. For example, last week Stephen Roach, traditionally the most high-profile bear on Wall Street, suddenly became bullish primarily because of a shift by central bankers (see Wall Street bear changes into a bull). In his view, the increases in global interest rates mean they are now playing a benign role rather than a negative one. Fans too see central bankers as enormously influential. The growth in the stability of the global economy over the past two decades is widely attributed to them (see “Global stability needs explaining“ Fund Strategy April 17, 2006). According to this view, by pursuing stability within monetary policy, they have played a key role in promoting broader economic stability. From this perspective, they are the heroes of the modern world economy. According to both views, central banks have, or at least should have, learned the lessons of the past. They realise that economic instability is a problem and are determined to fight it. As a result, so the story goes, the world has become a better place. But imagine if a group of the world’s most astute central bankers could be sent back in time to the 1970s or, even further, to the 1930s. It is hard to believe that, however clever they were, they could bring stability to a crisis-ridden economy. The economic problems were so fundamental that tinkering with monetary policy would make little difference. In reality, the fans of central bankers have got it the wrong way round. It is not central bankers who have brought economic stability but economic stability that has enhanced the reputation of central bankers. Those who run the world’s central banks have benefited from being in the right place at the right time. Previous comments in Fund Strategy have examined the reasons for this stability. Most notably the demise of social conflict with the end of the Cold War has given both businesses and politicians more room to manoeuvre. Broader social forces have brought economic stability, at least for the time being, rather than the clever bureaucrats from the world’s central banks. It is true that central bankers can have disproportionate importance in a world where stability is given. But if circumstances change, they could find themselves having far less control over the situation than they, and their fans, might expect.