countries'poor experience with a fixed, but adjustable, exchange rate regime. the first country to formally adopt a policy of targeting inflation was new zealand in 1990. canada did the same in 1991, followed by the united kingdom, sweden and australia. other industrial countries have also introduced some variant of inflation targeting since then, most recently two other nordic countries, namely norway and iceland. it is interesting to note that before the 1990s the predominant view was that a floating exchange rate regime is not suitable for a small open economy. today, i believe that experience has been exceptionally good among those countries that are explicitly targeting a low rate of inflation. in fact, some emerging market countries are now building the same kind of regime. in recent years countries such as south africa, brazil, the czech republic, poland and thailand have been inspired to introduce a similar strategy. consequently, explicit inflation targets have been introduced in quite a number of countries. the challenge during the 1990s for the inflation targeting countries has been to build a rigorous analytical framework around the new regime. questions such as the choice of rate and index to be targeted, the usefulness of tolerance intervals around the target and the degree of transparency in the monetary process all needed to be answered. it has also been important to formulate a monetary policy reaction function ; in particular, to define the balance between inflation variability and output variability. the reason why central banks do not aim for maximum short - term stability in either inflation or output is that attaining only one of the targets would be costly for the economy. on the one hand, the central bank's legitimacy among the general public could suffer if short - term interest rates have to move sharply, causing output to fluctuate widely while inflation is held stable and exactly on the target. maximum stability in output could, on the other hand, result in sharp fluctuations in the rate of inflation and erode the credibility of the monetary regime. a point somewhere midway between the two extremes must therefore be found. consequently we cannot be called " inflation nutters " as mervyn king, deputy governor of the bank of england, once said. let me also stress the importance of central bank independence. in order to be successful with the implementation of an inflation target approach, the central bank needs to be able to act independently of day - to - day party politics and to set interest rates continuously according to the specified inflation target. otherwise a credibility problem may arise because it would be hard for policymakers to convince the general public of monetary policy '

between west africa, brazil, and caricom, emphasising green trade and the sdgs, and identifying opportunities for reducing trade barriers and investing in infrastructure. the central bank of barbados wants to add to these efforts of making uwi a beacon for the region's development : we are pleased to announce that we will be working with the src and the cave hill campus to organise and digitise the works and files of pm owen arthur so that they can be made available to the researchers to draw inspiration from. conclusion 9 / 10 bis - central bankers'speeches in conclusion, i want to emphasise that we're not just passive witnesses to the transformation unfolding in the caribbean - we're active participants, changemakers, shaping our narrative. the goals i've outlined for environmental sustainability, human capital development, and tech innovation aren't distant landmarks ; they're stepping stones in our daily journey. every effort, every initiative, brings this vision to life, reflecting our unwavering spirit and resilience. we stand on the brink of unparalleled opportunities, illuminated by the golden jubilee of caricom and our strengthening ties with africa. our growth is tangible, felt in the lives of our people, the preservation of our environment, and the enriching of our regional and global partnerships. we're not confined to the echoes of the past ; instead, we're scripting a dynamic future where prosperity, inclusivity, and resilience are not aspirations but our lived reality. our reflections are not abstract but grounded in actionable insights. owen arthur's advocacy for functional cooperation is not a vestige of the past but an enduring framework. as we venture into intricate dialogues on growth, arthur's words serve as both a compass and catalyst. his belief that, " the future of each is bound up in the future of all, " encapsulates our journey of weaving individual progress into collective prosperity. our engagement tonight isn't a culmination but a continuation. each idea, insight, and aspiration contributes to a narrative enriched by diversity and solidarity. in the esteemed words of owen arthur, " in unity, there's not just strength but an invincible resilience, " a testament to our collective journey of crafting a caribbean narrative where sustainable and inclusive economic growth isn't a distant aspiration but a living, evolving reality. thank you! 10 / 10 bis - central bankers'speeches