Instead, major innovations and economic growth became the norm. If we are to understand why advances were made so rapidly, we have to look at areas that economists probably do not explore often enough. In England, a parliament had emerged as a counterweight to the crown and the landed nobility. There was also the introduction of patents, private property rights and – by the standards of the day – a stable tax regime. These were important, growth-friendly institutions which remain central pillars of modern economies. Growth in per capita GDP in England accelerated gradually during the 19th century. More countries eventually came on board and joined the technology race. The groundwork for two of the most important breakthroughs of the late 19th century – electricity and the combustion engine – was laid mainly in the US and Germany. These innovations remained key growth drivers well into the 20th century. At the same time, the US took over from the UK as the most important base for new advances. With the US in the driving seat, economic growth hit new heights, peaking in the middle of the 20th century. Since 1970, growth has slowed. Growth has moved on a new downward trend since 2000. Growth in Norway has shown a similar pattern. Immediately after the war, our per capita GDP was only around half that of the US. There was considerable potential for catching up, and growth was higher than abroad for a long period.
Jean-Pierre Roth: Recent Swiss experience in monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at a seminar on monetary theory and policy, University of Fribourg, Fribourg, 28 November 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  One continually recurring element in the history of the Swiss National Bank has been the application of a clear set of rules that we refer to nowadays as ′strategy′. The SNB′s monetary policy strategy consists of three elements: a definition of price stability, an inflation forecast and a fluctuation range assigned to a short-term interest rate. Experiences with this strategy since its introduction in the year 2000 – judged in terms of both price stability and cyclical developments in the economy – have demonstrated its value. Nevertheless, certain aspects of the strategy have been questioned by academics and by central bankers. These include inflation forecasting under the assumption of a fixed Libor, the choice of the reference interest rate, the role of monetary aggregates and exchange rates in the SNB′s models, and the decision not to publish the minutes of Governing Board meetings. However, these deliberately selected elements in fact serve to reinforce the legitimacy of the SNB′s strategy. BIS Review 139/2007  1