The recent global financial crisis has revealed the limits of standing macroeconomic policy frameworks that rely on monetary and fiscal policies alone. These policies moderated business cycles and kept inflation low and stable, but they were unable to prevent a massive build-up of systemic financial risk and, ultimately, a deep and prolonged global recession (Blanchard and others, 2010).
The notion that central banks should act as lenders of last resort is not controversial. How best to carry out that responsibility is, however, not widely agreed upon. One view holds that the financial system is inherently fragile, and a central bank should forego other objectives, such as preventing inflation, when financial instability threatens. An alternative view argues that by controlling inflation a central bank will in fact promote financial stability. Anna Schwartz (1988; 1995), for example, contends that financial instability has often been caused by monetary policies that cause fluctuations in the rate of inflation. She argues that monetary policy should focus exclusively on maintaining price stability.
The food supplies and therefore the diets of economically developing countries are now generally in rapid transition. This nutritional transition is accompanied by equally rapid changes in levels of physical activity and body composition. This nutritional transition can be seen as part of a more general demographic/nutritional/ epidemiological transition. The demographic transition, from generally rural societies with low life expectancy at birth and families with many children to generally urban societies with higher life expectancy at birth and fewer children, has been well documented. The epidemiological transition that follows the demographic transition is also fairly well understood: in general, the dominant diseases shift from endemic deficiency and infectious diseases, mostly of earlier life, to epidemic chronic diseases, generally of later life (Omran 1971).
There is now enough evidence to propose a general theory of causally as well as chronologically linked demographic/nutritional/epidemiological transition. Put simply, the theory proposes that when populations face massive social and technological change that includes increasing urbanization as a key component, the pattern of their food supplies and therefore their diets, with associated factors, also changes; and, consequently, disease patterns also change. Historically, this general transition can be traced in countries that are now economically developed, e.g., Britain between the sixteenth and eighteenth centuries as it went through agrarian and industrial revolutions. Now, in Latin America, Africa, and the Asian countries studied in this review, the linked transitions are taking place much faster, and in some cases extremely rapidly.
