This learning process helped to drive some of the financial innovations that I discussed earlier, which, in turn, helped households and businesses to economize on holding inflationary assets. Economists and central bankers also devoted great attention to understanding the causes and consequences of inflation, providing the intellectual underpinning to policies oriented toward price stability.
The fourth factor I wish to mention relates to changes in the institutions of central banking that may have increased the costs of pursuing high-inflation policies. The most notable change is the increased independence of many central banks and the corresponding reduced control of the fiscal authorities over monetary policy.