The first lesson is that central banks can and should take responsibility for delivering low and stable inflation. It may seem strange now that central bankers and others once needed convincing on these two fronts, but as former Chairman Ben Bernanke has shown, both propositions were widely questioned during the Great Inflation period.1 Today, we regard these questions as settled.
Trying to understand better how we think is a timeless quest, spanning numerous disciplines such as philosophy, psychology, biology, neuroscience and political science, as well as economics. These all offer different perspectives and the picture that emerges confirms in some ways the obvious: decision making is an extremely complex process.