central banks flexibility in how to use the tools of monetary policy, such as policy interest rates, to achieve their goals. in the case of the fomc, instrument independence has allowed it to adopt new ways to achieve its goals, as the financial system has evolved over the decades. this has been particularly important when the economy faced unprecedented challenges, as it did during the 2008 global financial crisis and during the 2020 pandemic. because of this flexibility, the federal reserve board and the fomc were able to respond promptly and, as it turned out, very effectively. across countries and jurisdictions, goal independence and instrument independence have different dimensions and many variations. in some countries, including india, brazil, and south korea, the targets for inflation rates are jointly decided by the central bank and the ministry of finance. in contrast, the central banks of chile, colombia, mexico, and peru, among others, are given authority to choose their own inflation objectives. to understand how governments have come to embrace the independence of central banks, it is helpful to review how they have evolved from their origins in the 17th century. sweden ’ s riksbank was established by the private sector in 1688 to lend the government funds, and the bank of england followed in 1694, with a similar structure and purpose. 8 other european central banks followed in the 19th century and a wave of many more in the 20th, including the federal reserve. at different times, these central see bordo ( 2007 ). - 7banks made the transition from wholly private to wholly public institutions and became accountable to government, and by the mid - 20th century, there was a growing recognition that independence made for a more practical and, ultimately, more effective central bank. in the united states, the moment of truth came in 1951. during world war ii, the federal reserve had agreed to peg interest rates on treasury securities in order to ensure smooth funding of the war effort, and after the war, it continued to peg the longer - term treasury rate. in the early 1950s, inflation soared, but treasury favored continuing a cap on longer - term interest rates so that debt management costs could continue to be low during the korean war. after a series of high - level meetings, the federal reserve and the treasury reached an agreement in 1951 that freed the fed from the obligation to fix interest rates and allowed it to use monetary policy independently to pursue national economic goals. researchers have analyzed the historical experiences of particular central banks, such as the federal reserve

mismatch ” - - namely, that employment among lowskilled black men depends on proximity to employers who hire black workers. in one of many studies on opportunity, chetty and others ( 2014 ) use internal revenue service tax return data from 40 million adult children to estimate the relative upward mobility across the 741 commuting zones ( both metro and rural ) in the united states. - 13 residential markets in the country. they highlighted the challenges facing the highly insecure rental population in milwaukee, which were brought alive by matthew desmond ’ s careful research. 38 other communities across the nation face similar challenges. in the recently released shed, we found that among renters who had recently moved, 12 percent of african americans, 16 percent of hispanics, and 8 percent of whites had moved because of eviction or the threat of eviction. 39 the barriers to safe and affordable housing often take on a different form in rural areas, where ownership of manufactured housing is often coupled with insecure land ownership. the geographic footprint of the 12 federal reserve districts gives us a valuable presence in rural america as well as in towns and cities of all sizes and economic fortunes. near el paso, our team has developed important analysis of housing challenges in the colonias neighborhoods, where the lack of basic infrastructure and costly financing of warranty deeds pose special hurdles for local families. 40 we have also seen successful models of providing affordable and safe housing when community development organizations and financial institutions, along with banks and local residents, work together collaboratively. on a recent visit in el paso, i saw the value of these approaches, as a single mother with significant health challenges received the keys to a new home in a stable community, after many long years. while the densely wooded hills and hollers of eastern kentucky are a sharp contrast to the desert and floodplain expanses of the southwest, the keys to affordable housing in a healthy community can bring just as great an improvement in opportunity. these successes would not be see desmond ( 2016 ). see board of governors ( 2017 ). see federal reserve bank of dallas, community development department ( 2015 ). - 14 possible without the ingenuity and collaboration of community development financial institutions, local officials, banks, and community members. as i have witnessed, whether it be for a retiree in helena, arkansas ; a single mom in el paso, texas ; or a dad on disability in emlyn, kentucky, the keys to affordable housing in a stable community can unlock opportunity