Before the establishment of central banks, private banks and governments issuing banknotes had often overextended their gold reserves. In a sense, early central banks were strongly committed to price stability. However, from the 1920s onwards many central banks fell under public control. The Great Depression led to a major reaction against central banks, which were accused of exacerbating the crisis.
That would help “the fox” to outsmart the opposing forces and overcome the immediate obstacles, and enable “the hedgehog” to stay the course of medium-term price stability, sustained growth and high employment. So why not pursue it? Many thanks for your attention, and welcome to the seminar. 1 Michaela Schmöller, Secular stagnation: a false alarm in the euro area? Bank of Finland Bulletin 4/2018.