When the bonds matured, the Norwegian government wanted to make the repayment in banknotes that had lost much of their value. This implied a devaluation that could perhaps be compared to the devaluation under Henry VIII. The case finally came before the Supreme Court in 1962. In their voting, the Supreme Court gave weight to a law from 1923, which stated that the gold clause, i.e. repayment in gold money, did not apply when the obligation to redeem banknotes for gold had been suspended, which was permanently done in September 1931. In the explanation of their ruling, the Supreme Court also referred to “vital national interests”. It would cost Norwegian taxpayers far too much to repay the gold money that had been borrowed 60 years earlier. It would be far too pretentious of me to offer an opinion on the court ruling as such. What makes this case interesting in the light of today's topic is that in the Supreme Court's assessments of “vital national interests”, there is no discussion of what the nation's interests are in the short term versus the long term. However, it must be added that it is probably not easy for a court to review other government authorities’ assessments of this point. There is also the question of whether this falls within the court's purview. 5. Modern monetary policy – a promise both possible and right to keep  The theoretical breakthrough by Kydland and Prescott and the era of high inflation eventually had implications for practical policy.
And I am convinced that today’s conference will play an important role in sharing developments in the frontier economies – the next wave of emerging economies which will contribute to the regional and global growth and prosperity. 17. Last but not least, I would like to express my sincere gratitude to our cohosts, the International Monetary Fund (IMF) and the Japan International Cooperation Agency (JICA), who make the conference possible. I wish you all a successful conference and look forward to your discussions. 18. Thank you. BIS central bankers’ speeches  3