We continue to believe that this regime has served us exceptionally well, in both turbulent and tranquil times. Nevertheless, we, like many of our counterparts elsewhere, are re-examining key features of our monetary policy framework in the light of recent events. However, we are doing so as part of an ambitious and long-standing research program initiated in 2006.
Inflation rates have come down dramatically since 1995, in part as a result of better monetary policy, assisted in many cases by more flexible exchange rate regimes that allowed monetary authorities to focus more intensively on domestic price stability. In addition, structural progress has been made on the fiscal side in emerging markets.