siden 1900 ( the norwegian credit market since 1900 ) samfunnsøkonomiske studier no. 19, statistics norway, oslo. see also mykland, knut ( ed. ) cappelens norgeshistorie, vol. 13 page 86. for further discussion of parity policy and norges bank ’ s role, see ecklund, gunhild j. ( 2008 ), pages 46 - 51 and 67 - 71 : “ creating a new role for an old central bank : the bank of norway 1945 - 1954 ”, series of dissertations 2 / 2008, bi norwegian school of management, oslo. this link to gold was not as strong as when the obligation to redeem in gold applied. under the bretton woods system, countries whose public finances were in disequilibrium, or who allowed inflation to rise for other reasons, had to let their exchange rate depreciate against the dollar. when the exchange rate against the dollar fell, the value of money measured in gold decreased. the post - war period was marked by the strong conviction that the economy could be finetuned by the coordinated use of instruments decided at a centralised level. the value of the krone was pegged to the dollar and to gold while a policy of low interest rates was accompanied by an ample credit supply. this was possible in a highly regulated economy. the positive attitude to regulation probably stemmed from the period of rationing and centralised government during world war ii. the system had functioned reasonably well and a regulatory apparatus was already in place. 21 internationally, there was widespread desire to stabilise economic developments, originating in theories published by john maynard keynes in the early 1930s. this was part of the background for norwegian politicians ’ ambition to fine - tune the economy in norway. the works of a. w. phillips 22, published in 1958, also supported this view. according to phillips, a country could apparently choose between low unemployment and low inflation. this menu option is often referred to as the phillips curve. and what kind of “ option ” was that? unemployment is real, while inflation is only changes in an index! by formulating the question in this way, the choice was obvious. this analysis had a considerable impact on economic policy. the global economic situation became difficult into the 1970s, with low growth and high inflation in norway and other countries. the us and european authorities opted to pursue an active counter - cyclical policy rather than combat

speech the transmission of monetary policy speech by philip r. lane, member of the executive board of the ecb, at the suerf, cgeg | columbia | sipa, eib, societe generale conference on “ eu and us perspectives : new directions for economic policy ” new york, 11 october 2022 introduction in our september monetary policy meeting, the ecb ’ s governing council communicated that, over the next several meetings, we intend to raise our key policy rates towards levels that will ensure the timely return of inflation to our two per cent medium - term target. in identifying the appropriate levels for the key policy rates, a range of factors must be considered. first, an assessment of the medium - term outlook for inflation is required : the quarterly staff macroeconomic projection exercises provide important foundations, while each meeting also draws on wide - ranging overviews of the latest economic, financial and market developments in order to develop an assessment of both the most - likely medium - term inflation path and the balance of risks around that path. second, this assessment forms the basis for calculating the monetary policy path that is required to eliminate in a timely manner the gap between the projected inflation rate ( that would be expected to materialise if monetary policy were not modified ) and the two percent inflation target, while also narrowing the distribution of inflation risks around the most - likely path. this calibration stage crucially relies on a quantitative analysis of the various stages in the monetary policy transmission mechanism. working backwards, monetary policy can be viewed as affecting inflation through two main channels : ( a ) reducing inflationary pressure by increasing economic slack ( lowering aggregate demand relative to the supply capacity of the economy ) ; and ( b ) ensuring that medium - term inflation expectations are anchored at the two per cent target. the first channel can be de - composed into several links : ( i ) the link between our monetary policy instruments – our policy rates, our balance sheet policies and our communication policy ( including any forward guidance ) – and financial conditions ; ( ii ) the link between financial conditions and economic slack ; and ( iii ) the link between economic slack and inflation pressures. the second channel can be broken down into a further two elements : ( iv ) if inflation expectations are broadly anchored, the monetary policy needed to ensure expectations remain anchored ; and ( v ) if inflation expectations are de - anchored ( or at serious risk of being de - anchored ), the monetary policy needed to ensure inflation expectations are re - anchored. in what follows