the unexpected inflation of the 1970s, which greatly reduced the real value of mortgage loans made by the s & ls in an earlier, low - inflation era. these losses effectively de - capitalized the savings and loans, helping to set the stage for the problems that followed. although price stability is an end of monetary policy, it is also a means by which policy can achieve its other objectives. in the jargon, price stability is both a goal and an intermediate target of policy. as i will discuss, when prices are stable, both economic growth and stability are likely to be enhanced, and long - term interest rates are likely to be moderate. thus, even a policymaker who places relatively less weight on price stability as a goal in its own right should be careful to maintain price stability as a means of advancing other critical objectives. let me elaborate briefly on the relationship between price stability and the other two goals of monetary policy. first, price stability promotes efficiency and long - term growth by providing a monetary and romer and romer ( 2002 ) provide historical documentation of policymakers'support for the idea of a permanent inflationunemployment tradeoff. feldstein ( 1997 ). financial environment in which economic decisions can be made and markets can operate without concern about unpredictable fluctuations in the purchasing power of money. as i have already noted, the dollar provides a reasonably secure gauge of real economic values only when inflation is low and stable. high and variable inflation degrades the quality of the signals coming from the price system, as producers and consumers find it difficult to distinguish price changes arising from changes in product supplies and demands from changes arising from general inflation. because prices constitute a market economy's fundamental means of conveying information, the increased noise associated with high inflation erodes the effectiveness of the market system. high inflation also complicates long - term economic planning, creating incentives for households and firms to shorten their horizons and to spend resources in managing inflation risk rather than focusing on the most productive activities. research is not definitive about the extent to which price stability enhances economic growth. we do not have controlled experiments in macroeconomics, and inflation and growth are both endogenous variables that respond jointly to many factors. nevertheless, i am confident that the effect is positive and see the international experience as at least consistent with the view that, in combination with other sound policies, the maintenance of price stability has quite significant benefits for efficiency and growth. that view appears to be

digitalization, sustainability, and social inclusion. while infrastructure investment is an important lever for supporting the post - covid recovery, the common goal is to look beyond the short term and embark on an infrastructure agenda that can contribute to a lasting broad - based prosperity. as for the international finance architecture working group, we need to preserve international financial stability whilst transitioning from the emergency response to the crisis towards the recovery stage. the work of this group will focus on four main areas : debt, global financial resilience, the financing needs of vulnerable countries, and the implications of the rise of digital currencies for the international monetary system. 6. the g20 finance track also strives to sustain the recovery by developing long - term strategies to foster the transformation towards greener, more digital and inclusive societies. today – looking beyond the current situation – i would like to touch upon three of the most pressing challenges that the world economy is facing in the coming years. they are core themes of the agenda of the italian presidency : climate change, future potential pandemics, and financial inclusion. some of these were policy priorities even before the covid - 19 pandemic. the shock has nevertheless brought about some swift structural transformations, together with new opportunities, that make it all the more urgent to address these issues in a coordinated and effective manner, without any complacency. 7. protecting our planet means building more resilient societies and tackling the climate challenge. the natural environment is being threatened by the effects of climate change, with increasing repercussions on our economies. last year, together with 2016, was the warmest on record. we must curb the carbon footprint of human activities. this is going to be expensive and complex under many dimensions, from the technical to the political. based on alternative scenarios regarding the timeline and the intensity of the introduction of risk mitigation policies, defined by the network for greening the financial system ( ngfs ), a worldwide group of about 70 central banks and supervisors, the picture that emerges warrants resolute action. to allow a smooth transition to net zero co2 emissions by 2070, keeping the rise in global temperature within 2°c, in line with the paris agreement goal, policy response must be prompt, extensive and coordinated. delays and hesitation would only force more costly and brutal adjustments in the future. an ambitious green agenda is at the core of the italian g20 presidency. we believe the finance track should bring sustainability back