Graham Towers, James Coyne, Louis Rasminsky and Gerald Bouey had extolled the virtues of price stability and had regarded it as one of the Bank’s most important objectives. But it had never been defined and the extent of the Bank’s commitment to achieving it was not always clear. The major preoccupation of the 1970s and early 1980s had been to “get inflation down”.
How far down was a question that could be postponed for a later day, once we were within striking distance of this nirvana. The problems that arose because there was no clearly articulated and credible objective or end point for monetary policy were most evident in financial markets.