and quickly descended in 2023. that can be taken as a sign of anchoring and sufficient central bank credibility through the lens of the model just described. and, to the extent that long - run inflation expectations matter to the dynamics of actual inflation, such as in some phillips curve models, anchoring of inflation expectations is one of the key elements leading to stable inflation. 23 the model also offers an interpretation of and a contrast to the behavior of inflation and inflation expectations during the great inflation of the 1970s and in the post - pandemic period. as inflation rose in the 1970s and monetary policy actions failed to rein it in, the federal reserve lost credibility, and longer - term expectations of future inflation rose toward the end of the decade. the federal reserve struggled for years to rebuild that credibility, resulting in high and volatile inflation. conversely, in the recent episode, inflation has traveled a long way from its peak, with no deterioration in see yellen ( 2015 ). - 12 economic activity and comparatively limited movement in long - run inflation expectations. credibility is enhanced by transparency and accountability, and i will conclude with a discussion of how these principles are carried out by the federal reserve. the federal reserve seeks to explain as clearly as possible what it is trying to do in carrying out its dual - mandate objectives and how it is trying to do it. such transparency and accountability are necessary under our democratic system but are perhaps especially important for the federal reserve, which has been assigned such an important role in promoting a healthy economy. in addition to conferring legitimacy for decisions, transparency makes monetary policy more effective, as the public better understands our monetary policy reaction function, which informs the public on how our decisions are shaped by economic conditions. monetary policy works in part by trying to influence the public ’ s view of future economic conditions, so it is crucial that these intentions are clearly communicated. the federal reserve promotes transparency by issuing a postmeeting statement explaining its decision and then following up with more detailed minutes three weeks later. every three months, fomc participants ’ projections for inflation, unemployment, economic activity, and the likely path of monetary policy are published in the summary of economic projections. the chair conducts press conferences after each fomc meeting, and both the chair and fomc participants further explain their reasoning on policy in speeches, news interviews, and other public appearances. the chair testifies to congress on monetary policy twice a year, responding to questions from lawmakers. transcripts of fom

, to understand the transition toward central bank independence and how it affects economic performance. 9 in addition, researchers have also developed large cross - country indexes measuring the level of central bank independence while capturing multifaceted aspects of this independence based on banks ’ legal statutes over long periods. 10 the empirical regularity that stands out in many different studies analyzing these indexes is the rise in central bank independence starting in the 1980s, with studies analyzing at least 120 countries. 11 for a review of the historical experience of the united states in particular, see binder s, spindel m. ( 2017 ). one early index is due to cukierman, webb, and neyapti ( 1992 ). it captures some aspects of various institutional arrangements, such as the presence of a mandate on price stability or additional mandates. see dincer, eichengreen, and martinez ( 2024 ). see also romelli ( 2024 ). - 8economic research has cited several factors driving this adoption of central bank independence. in the 1980s and 1990s, emerging economies saw central bank independence as a way to facilitate access to global trade and financial markets, which were liberalized during that time. 12 another important factor was the experience of developing country debt crises during this period, which led to demands by creditor banks and international lenders for central bank independence. 13 to whatever extent these other factors pushed governments toward central bank independence, a consensus developed that such an arrangement yielded better economic outcomes. based on measures of central bank independence, researchers indeed have found a relationship between independence and lower inflation, especially for advanced economies. 14 while evidence of a negative relationship between independence and inflation has been a bit more elusive in the case of emerging market and developing economies ( emdes ), the economic literature does find a relationship between independence and lower inflation volatility in these countries. 15 among the reasons i would cite for why it is more difficult to find a relationship between independence and lower inflation in emdes is that legal measures of central bank independence, also called “ de jure independence, ” may not reflect the relationship between the central bank and the government that exists in practice — referred to as “ de facto independence. ” in countries where the rule of law is not as strongly embedded in their institutions, there can be wide gaps between the formal, legal institutional arrangements and their practical effect. 16 see maxfield ( 1997 ). see cukierman ( 2008 ). see crowe and meade ( 2008 ). see ga