The near loss of price stability in the 1970s led to serious attention being paid to the role of expectations in economic management and the need to find monetary rules that respected changing incentives faced by households and firms under different economic environments. Models were then developed that mostly yielded arguments for price stability under an interest rate feedback rule and for a decade or so, under the Long Expansion, all seemed well.

The transcript and downloadable versions of the lecture are available from the Gresham College website: http://www.gresham.ac.uk/lectures-and-events/the-science-of-monetary-policy

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