on real world problems and taken a pragmatic approach. at the same time, it has tried to make extensive use of research - based knowledge. * * * current monetary policy leans heavily on economic research in at least in two respects. firstly, the current objective of price stability, and a monetary policy system based on an independent central bank that implements it, is the result of monetary policy research of the 1980s and 1990s. this research emphasised the importance of expectations, policy credibility and price stability. this research is also the basis of the status of the eurosystem, its structure and its monetary policy, although another highly influential factor here was the example provided by the successful monetary policy of germany. economics, education and unlearning. post - crash economics society, university of manchester, 2014. haldane, a : foreword. economics, education and unlearning. post - crash economics society, university of manchester, 2014. bis central bankers ’ speeches secondly, the monetary policy pursued during the crisis and after it, which even globally has had to adopt many brave and unconventional methods, is also based on research. it is interesting that, from the viewpoint of economic policy during the crisis, research into economic history has had a particularly profound influence. of note, the research on the causes of the great depression of the 1930s has in recent years come to be held in high regard, and it has played a crucial role in monetary - policy decisions. the chairman of the united states federal reserve at the time the crisis came to a head, ben bernanke, has been a key figure here. he is known specifically as an expert on the great depression of the 1930s. it has been bernanke ’ s view that the protraction of that depression was caused by misguided monetary policy. this, in itself, was not a new discovery. milton friedman and anna schwartz had already blamed the federal reserve for turning the crisis into a depression by allowing the quantity of money to decline. in finland, yrjo jahnsson expressed similar views in his own time. bernanke ’ s contribution to the debate was his emphasis on the importance of the banking system. according to bernanke, the drying up of bank liquidity and the collapse of their lending capacity were the factors that turned a recession into the great depression. he further argued that the global monetary system based on the gold standard transformed the depression into a global one that spread even to countries that were not suffering

, it should be kept in mind that, for example, in the euro area and in finland, many of the problems of the real economy are structural and could not be solved by monetary policy, which can only buy time for solving them. in terms of price stability, monetary policy has not met our expectations in recent months. the inflation rate in the euro area is currently clearly below the ecb ’ s target rate of close to, but below, 2 percent. the decline of interest rates to their theoretical minimum, or close to it, has raised new questions. how can monetary policy sustain price stability if the situation requires new actions to get back to price stability when the main instrument of traditional monetary policy, the interest rate, is already at its minimum? different central banks have had to confront this question at different points in time. in the case of the ecb this happened last summer when the policy rate was lowered to the minimum and still the rate of inflation has remained well below the target. in this situation, the ecb has adopted some new monetary policy programmes based on securities purchases : a covered bond purchase programme and an asset backed securities purchase programme. at the same time, banks have been offered collateralised long - term credit in order to speed up lending to businesses. the intention is that the balance sheet of the eurosystem should grow to the level where it was at the start of 2012. the ecb ’ s governing council has unanimously stated that should the need arise, even new monetary - policy instruments will be utilised if the period of low inflation threatens to last too long. as the modes of operation of monetary policy are changing, at least temporarily, research has much to offer to decision - makers. i will just mention here the three most central areas of research connected with the current situation : the use of anticipatory communication of monetary policy, the so - called forward guidance, as a stabiliser of inflation expectations ; the effect on inflation and growth of securities purchases by central banks ; and the question of a neutral interest rate level in the postfinancial - crisis world. all of these areas have been subject to much useful research, which is monitored by central banks and in which they also take part. 8 the seriousness and determination with which central banks have in recent years acted to secure banks ’ liquidity, support economic growth and prevent a deflationary spiral, is indicative of the influence of economic research. the third problem mentioned by bernanke as having been