When the crisis is one of private debt, monetary policy can hardly induce agents to borrow more. This may be the reason why financing costs have recently increased, especially at long maturities, in spite of the fall in short-term interest rates.
Stan and I drilled down empirically into what particular aspects of central bank independence underpinned this correlation and concluded that inflation performance is likely to be better if there is goal dependence and instrument independence. Before discussing how these foundations stand up to scrutiny two decades later, I will spend some time talking about the overlap between central bank independence and inflation targeting.