The monetary policy stance of central banks swung from one extreme to  BIS Review 74/2004  1  the other giving rise to business cycles and higher and higher inflation rates as also higher and higher unemployment levels - an excellent way of sharing misery but not of creating solid wealth. Central bankers became increasingly disappointed.
What should central banks systematically aim at to finally achieve the ultimate goals of growth and high employment levels? Academics and central bankers debated the question. Researchers emphasized the monetary nature of inflation. Lasting price stability came to be accepted as a necessary condition for sustained growth and high employment levels. Country experiences supported this perception.