The newly independent central banks often identified inflation as the singular objective of monetary policy to gain credibility and facilitate the transition to price stability. In addition, the government wanted to ensure accountability of the central bank and hence often opted for a narrow and explicit objective.
With price stability now largely accomplished, some of these central banks are becoming more flexible in their approaches to monetary policy by recognizing a role for short-run stabilization. B. How explicit should the objectives be? In the United States, Congress has set the objectives for monetary policy in the Federal Reserve Act, as amended in 1977.