In 1983, he applied the information asymmetry argument to the role of central banks and concluded that central banks, to have credibility in inflation fighting, must be locked into inflation targets that they cannot violate to reduce unemployment.
I 1983 anvendte han et tilsvarende argument om asymmetrisk information på centralbankers rolle og konkluderede, at centralbanker for at have troværdighed i bekæmpelsen af inflation må have inflationsmål, der ikke kan brydes for at begrænse arbejdsløshed.