Charles A. E. Goodhart: Central bank policies before and after the crisis 33-41

Following the defeat of inflation by Volcker in the early 1980s and the subsequent adoption of inflation targets, the subsequent 15 years, 1992-2007, saw the best world macro-economic outcomes ever. But we forgot the Minsky dictum that macro-economic stability breeds financial instability, and the Great Financial Crisis (GFC) ensued. Enlightened monetary policies soon overcame the worse of that, but growth and productivity remains sluggish. It is not clear why that occurred; there are various possible reasons. In this context, monetary policy has had to remain extraordinarily expansionary, but this has encouraged further debt accumulation, which could lead to problems if interest rates need to normalise.