Central Banking: Between Monetary Policy and Global Crisis

The central banks have been at the heart of the recent global financial crisis and they are facing unprecedented challenges: ensuring monetary stability in a period of deep financial turmoil, which seems to require a rethinking of the theoretical precepts andthe international monetary practice. This study is a survey on the evolution of the central bank, in terms of functions performed throughout its history, in the context of the dominant paradigm of each stage of society’s evolution. The work caries out an empirical research of monetary policy impact regarding the stability of prices on the evolution of inflation over the last fifty years, since the great inflation to the current global crisis. The paradigm dedicated to monetary policy, focused on the price stability as a priority objective, seems unable to resist the crisis. Although there is an agreement on maintaining price stability as a priority objective of the central banks, most researchers and practitioners believe that the financial stability is as important for the monetary authorities