a speech last fall, one possible reason for such common changes in monetary policy may have been greater currency competition ( kroszner, 2006 ). in broad terms, the idea is that increased globalization, deregulation, and innovation raised the returns to low inflation – and increased the penalties for high inflation – relative to results obtained twenty or thirty years ago. for example, deregulation has led to an opening of capital markets, and hence financial globalization, which has in turn boosted innovation and helped to increase global competition by shrinking barriers of time and woodford ( 2003 ) includes results of this sort. distance. accordingly, trade and financial linkages between countries have tightened tremendously in recent years. meanwhile, substantial financial innovations – including advances in electronic payment systems and trading systems as well as more widespread credit card networks and increased use of mutual funds – have facilitated the movement of wealth around the globe. as a result, deregulation, globalization, and innovation have made it easier for citizens to move their wealth out of nominal assets in their local currency and thereby avoid any inflation tax should their government show signs that it might resort to inflationary tactics to finance spending. 6 at the same time, the public ’ s understanding of the costs of inflation has increased, in part because of experiences of high inflation in many countries in the 1980s. almost everywhere, public opinion eventually turned against allowing inflation to continue. this public pressure has reinforced the trend against inflationary policies. increased competition among currencies, driven by the confluence of factors that i just described, has limited the ability of governments and central banks to pursue high - inflation policies. moreover, currency competition has raised the costs of poor policy and thus increased the incentives of the monetary authorities to maintain low inflation. many of these arguments will apply with greater force in developing economies, where the costs of poor policies have been demonstrated quite clearly. nonetheless, i think that currency competition has played at least some role in disciplining policy in the united states and other developed countries. other explanations for the change in inflation dynamics of course, monetary policy may not be the whole story, and we need to resist embracing any single explanation too wholeheartedly. there may be other reasons for the changes in inflation dynamics. for example, the reduced sensitivity of core inflation to oil and natural gas prices likely also reflects both the increased energy efficiency of the economy and the fact that shocks to the prices of these goods since the mid - 1980s have, at least until the latest episode,

gabriel makhlouf : remarks on the mortgage measures framework review opening remarks by mr gabriel makhlouf, governor of the central bank of ireland, to the central bank listens event for the mortgage measures framework review, 15 july 2021. * * * welcome to the central bank of ireland, albeit virtually. i am delighted to welcome you to today ’ s central bank listens event. it is one of three listens events taking place this month focusing on the central bank ’ s mortgage measures. in 2015, the central bank introduced a set of measures to help guard against excessively loose lending standards in the mortgage market. while not always understood as such, the measures are essential to our mission to serve the public by maintaining monetary and financial stability and ensuring that the financial system operates in the best interests of consumers and the wider economy. we know that borrowers with high levels of debt relative to their income or to the value of their house are more likely to face financial difficulties in challenging economic times. by focusing on lending standards, the mortgage measures help to guard against a credit - fuelled house price boom like the one we saw in the 2000s re - emerging in the future. we review the effectiveness of the mortgage measures every year against their stated objectives. as part of that regular review, we look at the calibration of the measures and take into account wider housing and mortgage market developments. several changes to the calibration and functioning of the mortgage measures have taken place over the years because of these annual reviews. however, we ’ ve organised today ’ s event as part of our review of the overarching framework for the mortgage measures. you may be curious to know what exactly a framework review is and why are we conducting one now. as the mortgage measures are a permanent feature of the market, it is important that we not only do the annual review, but that we also consider the effectiveness of the overarching framework. this is good policy practice and i personally am not a believer in “ set and forget ” policy making, even if the policies have been effective. the framework review will take place throughout this year and next, alongside the regular annual reviews. it is now approaching seven years since the mortgage measures were first introduced. the environment in which we operate evolves constantly so it is important that our overall policy framework remains fit for purpose, whether that is the precise tools that we use, our strategy for how the measures operate in a changing environment, how we balance the benefits