For years leading central banhs have focused almost single—mindedly on the control of lnflation as the bedrock of economic prosperity．Whether they explicitly pursue an inflation target，as is the practice of the Bank of England，the Reserve Bank of Australia and many others，or implicitly do SO，as in the case ofthe Federal Reserve and the European Central Bank，these institutions carefully monitor price and output trends and have devel oped elaboratemodels for setting interestrates．all with the paramountgoal of achieving low and stable inflation．As Alan Greenspan testified tO Congress in the early 1990s．“The most important contribution the Federal Reserve can make to encouraging the highest sustainable growth the U．S．economy can deliver over time iS to provide a backdrop ofreasonablv stable prices，on average，for business and household decision making．"
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