The paths to price stability

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.