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It is an honour and a pleasure to be here today, participating in the fiftieth anniversary programme of the Deutsche Bundesbank, a great institution. With respect to our topic, ‘What have economists learned about monetary policy over the past fifty years?’, there are many interesting items since a lot has happened during this span. In 1957, the Bretton Woods system was just beginning to operate; the famous Economica paper by A. W. Phillips (1958) had not yet been published; the Brookings and MPS econometric models had not been developed; Milton Friedman had begun his assault on Keynesian orthodoxy but ‘monetarism’ had not evolved; neither John Muth nor Bob Lucas had received their Ph.D. degrees; central bank governors were not regularly featured in newspaper or television reports; and no one was discussing inflation targeting, transparency, financial derivatives, or Dynamic Stochastic General Equilibrium (DSGE) models.