Lessons from the Bundesbank on the occasion of its early retirement

The Deutsche Bundesbank Act of 26 July 1957 gave birth to the present German central bank. The independent Bundesbank successfully pursued its stated goal of price stability from then until the adoption of the euro, notably maintaining low levels of inflation throughout the post-Bretton Woods period. As with any sustained economic success story, there are lessons to be learnt. While the wealth and stability of post-war Germany provided an easier environment in which to make monetary policy than that facing central banks in many developing and transition economies, the lessons from the Bundesbank properly understood are of relevance for all central banks.