Jump to ContentJump to Main Navigation
Central Banking in Turbulent Times$
Users without a subscription are not able to see the full content.

Francesco Papadia and Tuomas Välimäki

Print publication date: 2018

Print ISBN-13: 9780198806196

Published to Oxford Scholarship Online: April 2018

DOI: 10.1093/oso/9780198806196.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 23 January 2020

Central Banking before the Great Recession

Central Banking before the Great Recession

Chapter:
(p.9) 1 Central Banking before the Great Recession
Source:
Central Banking in Turbulent Times
Author(s):

Francesco Papadia

Tuomas Vӓlimӓki

Publisher:
Oxford University Press
DOI:10.1093/oso/9780198806196.003.0002

The chapter describes the historical process as well as the analytical and empirical factors that, at the end of the twentieth century, led to the dominance, in advanced economies, of a central bank model based on an independent institution devoted to price stability as its overriding objective. The central bank pre-crisis model was elegant, performing, and efficient. However, it could not easily accommodate the pursuit of a traditionally important central bank objective: financial stability. Indeed, since central banks have, in essence, just one tool, that is, the interest rate, the pursuit of a financial stability objective in addition to a price stability objective could create dilemma situations. In the two decades between the mid-1980s and the mid-2000s, the economies of advanced economies were very stable, and this period was thus identified as Great Moderation. However, subsequent experience showed that, in this period, the crisis was incubating.

Keywords:   interest rate, central bank objective, Great Moderation, financial stability, price stability

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .