But we do know that there will be new processes and products and that the industry structure will change in directions that cannot be foreseen now. Nor can we exclude the possibility that Norway may enter a lengthy period of stagnation, for example when the petroleum sector is scaled back. Another lesson is that price stability is not self-generating. In the event of substantial disturbances and an unsuccessful economic policy, the economy may lose its nominal anchor. As a result, inflation may accelerate or be too low or negative, and production may become very unstable. As the country’s central bank, we take our work to safeguard price stability very seriously and we will continue to work towards this end. We set the key rate from month to month while keeping in mind the three-year horizon, but the objective is to generate confidence in stability in the value of the krone in the long term. Those of us who are still alive at the turn of the next century, will see if we achieved this objective. 2  BIS Review 43/2005
Alan Blinder has deftly set out 1 a spectrum of decision taking structures ranging from one individual, the Governor; through committees that are more or less collegial, with either a clear leader or a more collective approach; to committees, such as the Bank of England’s MPC, that are individualistic. Blinder and others identify advantages in a committee approach of some kind, essentially on the grounds, based on analysis or experiment, 2 that committees will generally make better decisions. That may leave out something rather important. Which is that in some countries a committee structure has been a pre-condition for achieving central bank independence in the first place. And that is a useful reminder of the political economy conditions in which monetary regimes are constituted and operate. Context matters, including possibly to some of the issues on your conference agenda. The UK’s post-war journey to monetary credibility illustrates that rather neatly. Environmental preconditions for independence: ideas and values For a long time, price stability simply was not the core objective of macroeconomic policy. A Bank of England piece in the late 1960s 3 described government’s twin goals as having been to improve trend growth and maintain high employment, to which was subsequently added balance of payments sustainability. When, in the mid-1970s, the UK suffered the indignity of having to borrow from the IMF, the Cabinet split over the Fund’s stability-oriented programme.