As a result of the bold response of central banks based on the knowledge and insights gained in the field of economics over the decades, a recurrence of the Great Depression was avoided and global concerns over deflation have faded to a considerable extent. However, the performance of the global economy today is by no means satisfactory.
9  Looking back, monetary policy to work on expectations has played a major role in keeping inflation in check following the bout of high inflation worldwide during the 1970s. The introduction of inflation targeting in many economies since the 1990s as well as the remarkable developments in monetary policy theory implicitly focused on responding to high inflation.