Elements of Effective Central Banking: Theory, Practice, and History

The key elements of effective central banking that account for much of the improvement in monetary policy around the world today are outlined and explained. The past quarter of the century has been a revolutionary period in which the world emerged from great inflation and output instability into a period of remarkably low inflation associated with a great moderation in the volatility of employment and output. How the mistakes and subsequent successes of the last quarter century of monetary history in the United States helped to shape monetary policy practice for the better are explained. [Foundation Day Lecture (to commemorate the Silver Jubliee of RBI Archives)].