Your work on time inconsistency with Finn Kydland helped form the intellectual basis for central bank independence. How did that work come about?

Finn Kydland and I had read [Robert] Lucas’s critique, which says you can only evaluate rules, so we asked: “What’s the best rule?”¹ The conclusion was this time inconsistency issue popped up. When you’re dealing with people, what happens in the future depends on what people think is going to happen. It’s complicated and you realise that if society