The Development of Monetary Policy in the 20th Century – Some Reflections
National Bank of Belgium Working Paper No. 186
32 Pages Posted: 23 Sep 2010 Last revised: 27 Sep 2010
Date Written: April 1, 2010
Abstract
In this paper I outline – from a practitioner’s as well as from a researcher’s perspective – several of the key developments that took place during the last century in monetary policy. In particular, I describe how the monetary system evolved from gold standard, prevailing throughout most of the last century, to paper money and how the norm in central banking changed from pure discretion after World War II to transparency and independence. I furthermore analyze how the exchange rate regime under Bretton-Woods impacted on countries’ monetary policy and, with a focus on Europe, how European Monetary Union (EMU) emerged from the European Monetary System (EMS). I then outline today’s relatively broad consensus on monetary policy and how it developed from a learning process on the side of central banks and important contributions from research. Finally, after arguing that the ECB’s monetary policy which fruitfully combines past experience and current research is a successful and promising approach, I outline some challenges lying ahead.
Keywords: monetary policy, monetary system, European Monetary Union, ECB
JEL Classification: A11, B22, E42, E58, F33, N1
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
An Overhaul of Doctrine: The Underpinning of U.K. Inflation Targeting
-
The Conduct of Global Monetary Policy and Domestic Stability
By Andrew P. Blake and Bojan Markovic
-
Opting Out of the Great Inflation: German Monetary Policy after the Break Down of Bretton Woods
By Andreas Beyer, Vitor Gaspar, ...
-
Opting Out of the Great Inflation: German Monetary Policy after the Break Down of Bretton Woods
By Andreas Beyer, Vitor Gaspar, ...
-
The Konstanz Seminar on Monetary Theory and Policy at Thirty
-
Can the Facts of UK Inflation Persistence Be Explained by Nominal Rigidity?
By David Meenagh, Patrick Minford, ...
-
By Riccardo Dicecio and Edward Nelson