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"The events of the past decade and a half are the story of two mistakes, one triumph, with the real possibility either of another mistake. Prior to the global financial crisis of 2007-9 many central bankers were dismissive about the need to worry about financial instability. The connection between finance and the real economy was severed. The decades since the 1980s saw several financial crises around the world with little lasting impact on the global economy. The second mistake was a failure to adequately appreciate how inter-connected the world's financial system had become. The fact that the crisis originated in the advanced world only increased the effect it had on the global economy. The triumph was the widespread acceptance by central banks, governments, and the public, that price stability is a desirable objective. Whether the desire to pursue low and stable inflation is cause or consequence of economic performance during the two decades that preceded the crisis remains hotly debated. There is also the prospect of another shock to come given the strategies adopted by central banks in the advanced economies. Whether it will be a positive one, or presage another major crisis, remains to be seen. The latter is more likely since the outlook at the end of 2016 is clouded by two sets of opposing forces. On the domestic front key advanced economies face a difficult exit from ultra-loose monetary policies. At the international tensions between central banks and the governments they are directly accountable to have heightened considerably. The book tells this story and provides some ideas about where to go from here in the area of central banking."

The introduction of inflation targets in Canada in 1991 ostensibly clarified the objectives of monetary policy, namely the pursuit of price stability. In doing so, one of the objectives of the new policy was to ensure that the public would henceforth be able to assess more easily monetary policy performance based on the Bank of Canada's record at achieving low and stable inflation. An obvious question then is to ascertain whether in fact, as the Governor the Bank stated recently,"... public commentary on monetary policy since 1991 has involved a fairer assessment of the performance of the Bank of Canada.ʺ Using information compiled on commentary about the Bank of Canada, and monetary policy in general, collected from the Globe and Mail and Financial Post national newspapers, we evaluate how favourable or critical such commentaries have been since 1986. In so doing, we examine a sample before inflation control targets were introduced, as well as the period since. The Bank of Canada also aims to influence expectations and financial market perceptions of its performance. Additional tests, using daily interest rate and exchange rates and monthly inflation and inflation forecast data, are presented which shed light on this question.

In a single volume, this book treats the theoretical, empirical, and case studies approaches to the implementation of monetary reforms and discusses specific countries' experiences with these approaches. The analyses are not restricted to central bank or exchange rate reforms, but consider all the principal tools of monetary reforms in this volume. The first section surveys and examines the types of monetary reforms. The second and third sections examine the pros and cons of exchange rate management and central bank independence. The final section of the book presents case studies on monetary and central bank experiences in Germany, the United States, Canada and Hungary