As so often occurs with the "obvious," however, the impression turns out to be incorrect. The economic research that I have discussed today demonstrates, rather, that the objectives of price stability and stabilizing economic activity are often likely to be mutually  6  BIS Review 21/2008  reinforcing.
Thus, the answer to the title of this speech – "Does stabilizing inflation contribute to stabilizing economic activity?" – is, for the most part, yes. A key policy recommendation from the past three decades of research in monetary economics is that monetary policy makers must always keep their eye on inflation and emphasize the importance of price stability in their actions and communications.