Central banks - Almighty or scape goats?

The 1990s could be termed "the decade of the central banks," as in this dec ade the banks have amassed extensive powers and gained independence from th eir governments. This shift, which followed a decade of high inflation in O ECD countries, was guided by insights from economic theory. The benefits of an independent monetary authority became clear, as did the fact that polit icians are unable to conduct monetary policy in a consistent way. The end o f the decade, however, brings new issues, as central banks have for the mos t part succeeded in taming inflation. Should they relax, especially since t hey use imperfect price indices that may overestimate inflation? Or should they try to incorporate the prices of financial assets into their considera tions? These are the questions that will occupy central banks in the next d ecade.