The paths to price stability

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Drastic reforms have taken place in the field of monetary policy. By the end of the 1990s, all advanced economies had established relatively restrictive monetary policies which consider achieving a low inflation rate more important than employment. This study analyses the reasons and preconditions for the move from activist Keynesian policies to low-inflation policies. The assessments are based on a comparison of developments in monetary policy and major reform experiences in 22 OECD countries between 1970 and 1999. The book tackles a central problem in comparative and international political economy in a systematic manner and enhances existing arguments in several ways. Not only does the study elaborate on the reasons for the policy shifts, but it also introduces a new and innovative method, putting forward a middle line between a comparative case study approach and statistically based comparative analysis. Furthermore, the book compiles detailed information on the design and development of monetary policy in a wide range of advanced industrialized democracies and presents a measure for major policy shifts.