independent central bank can lastingly defend monetary stability against a ‘society of excessive demands’. In other words, every society ultimately gets the rate of inflation it deserves and basically wants. Of course, this statement does not mean that institutions are irrelevant or that central bank independence is unimportant. Precisely the contrary holds true: in principle, resistance to making the central bank an independent institution with the single goal of price stability always reflects the intention of reserving access to influencing monetary policy whenever a currency loses value. Governments seeking re-election often have an incentive to achieve short-term benefits through inflation without considering its long-term costs. In view of the temptations inherent in the political process, a society can signal its determination to safeguard the stability of its money only by choosing the appropriate institutional arrangement. In this context, the independence of the central bank is a necessary, but not sufficient, condition.