Studies based on the experience of advanced countries such as the US, the UK, Canada and Japan also concurred with the view that price instability contributed to financial instability (Bordo and Wheelock, 1998).5 Did the financial crisis of the 21st century with its epicenter in the advanced countries change the world view of central bank objectives?
The dominant view, particularly among the advanced economies, was that monetary policy should ideally have a single objective, a corresponding single tool, and an operationally independent and accountable central bank. In fact, following this wisdom, many countries, both advanced and emerging markets, set explicit inflation targets and mandated inflation control as the paramount objective of monetary policy since the 1990s.