about whether monetary policy was excessively contractionary. 22 in this case, the existence of an explicit inflation objective channeled that debate into a substantive discussion over what should be the appropriate target for inflation, with both the bank of canada and its critics obliged to make explicit their assumptions and estimates of the costs and benefits of different levels of inflation. indeed, the debate, as well as the bank of canada's record and responsiveness to that debate, led to increased support for the bank, with the result that criticism of the bank and its conduct of monetary policy became much less of a political issue. another interesting example, which i do not have time to discuss in detail here, occurred with the granting of operational independence to the bank of england in may 1997 after it had adopted an explicit numerical inflation objective. 23 in explaining the decision to grant operational independence to the bank of england, the government specifically pointed to the bank's successful performance in providing forecasts and clear explanations of the likely effects of a range of policy alternatives, thereby increasing accountability and making the central bank more responsive to political oversight. inflation outcomes. the adoption of a monetary policy framework with an explicit inflation objective has hinged on the belief that such a framework ultimately delivers better inflation outcomes. thus, it is legitimate to inquire whether inflation outcomes in the economies that have adopted such frameworks have been in line with the stated objectives. chart 1 displays the inflation objective and the relevant measure of realized inflation in a sample of industrialized economies. overall, the economies that adopted explicit inflation objectives have experienced substantial improvements in their inflation performance ; indeed, in each case the central bank has been largely successful at keeping inflation in line with the stated objective, sometimes even more than might have been anticipated when establishing that objective. 24 of course, inflation has occasionally deviated from the objective, as one would expect from the fact that every economy is continuously buffeted by various sorts of this debate was triggered by a speech given by the president of the canadian economic association. for further discussion of this episode, see bernanke and others ( 1999 ). until may 1997, the setting of the monetary policy instrument had been determined by the government, not by the bank of england. at that point, the newly appointed chancellor of the exchequer, gordon brown, announced that the bank of england would henceforth have the responsibility for setting both the base interest rate and short - term exchange - rate interventions. for more discussion of this episode, see mishkin and pose

? transition risks are generally neither near - term nor likely to be material given their slow - moving nature and the ability of economic agents to price transition costs into contracts. there seems to be a consensus that orderly transitions will not pose a risk to financial stability. 15 in that case, changes would be gradual and predictable. households and businesses are generally well prepared to adjust to slow - moving and predicable changes. as are banks. for example, if banks know that certain industries will gradually become less profitable or assets pledged as collateral will become stranded, they will account for that in their loan pricing, loan duration, and risk assessments. and, because assets held by banks in the united states reprice in less than five years on average, there is ample time to adjust to all but the most abrupt of transitions. 16 but what if the transition is disorderly? one argument is that uncertainty associated with a disorderly transition will make it difficult for households and businesses total losses were $ 612 billion, of which losses on first - lien mortgages, home equity, and commercial real estate loans were $ 98. 8 billion. see https : / / www. federalreserve. gov / publications / files / 2022 - dfast - results20220623. pdf. in their reports on climate - related risks to the financial system, both the financial stability board and the financial stability oversight council ( 2021 ) indicate that risks to the financial system associated with an orderly transition are most likely contained. drechsler, savov, and schnabl ( 2021 ) estimated the average asset repricing maturity between 1997 and 2013 was 4. 23 years. - 9to plan. it is certainly plausible that there could be swings in policy, and those swings could lead to changes in earnings expectations for companies, property values, and the value of commodities. but policy development is often disorderly and subject to the uncertainty of changing economic realities. in the united states, we have a long history of sweeping policy changes ranging from revisions to the tax code to things like changes in healthcare coverage and environmental policies. while these policy changes can certainly affect the composition of industries, the connection to broader financial stability is far less clear. and when policies are found to have large and damaging consequences, policymakers always have, and frequently make use of, the option to adjust course to limit those disruptions. there are also concerns that technology development associated with climate change will be disorderly. much technology development