The Retreat of Inflation and the Making of Monetary Policy: Where Do We Stand?

This document contains the text of the 1998 Central Banking Lecture delivered at the London School of Economics and Political Science on June 4th. It starts by asking what factors have been behind the remarkable retreat of inflation that has taken place internationally since the mid-eighties, then goes on to examine the contribution of monetary policy of this process, and concludes by commenting what can be learned from central banks' recent experience in seeking out alternative anti-inflationary monetary policy strategies.