Our first stopping place will be the period of stagflation in the 1970s and early 1980s (section II). I believe that a number of important monetary policy lessons can be drawn from that episode. We shall then move on to our second stopping place.
It is the period of the “great moderation” (section III), which began in the early 1990s and now seems have come to an end with the recent increase in macroeconomic volatility. This episode has another set of interesting lessons to teach us.