That is, policy is credible because the central bank’s objectives are clear to the public  5  See Randall S. Kroszner (2006), “The Conquest of Worldwide Inflation: Currency Competition and Its Implications for Interest Rates and the Yield Curve,” speech delivered at the Cato Institute Monetary Policy Conference, Washington, November 16, www.federalreserve.gov/boarddocs/speeches/2006/default.htm.
6  For emerging-market countries that had experienced high inflations, another aspect of globalization fostering currency competition is the amount of physical dollars now present in these countries that allow citizens to conduct transactions and store liquid wealth without holding the local currency.