On Monetary Stability and Monetary Reform

The organizers have asked an important question, in my view, one of the most important questions - or more accurately set of questions - that can be asked of economists. How do we achieve greater stability? How big are the instabilities now, and how many of them are caused, or magnified, by current policy arrangements? Do fluctuating exchange rates augment or buffer shocks arising elsewhere, or are fluctuating exchange rates an independent source of disturbance? Can monetary reforms, domestic or international, increase stability without fiscal reforms, greater stability of trade policy and perhaps, either changes in political systems or fewer opportunities for politicians to influence economic events.