Monetary policy and economic stagnation

Is monetary policy responsible for the economic volatility and stagnation that developed economies have experienced - since 1969? A convincing argument exists: that raising interest rates increases the inflation level; interest rate hikes increase the price level of manufactured goods and reduce the amount produced. The continual use of monetary policy to control inflation will eventually reduce local production and increase imports.

Is the world economy on the edge of a financial and economic abyss? Has forty years of raising interest rates to fight inflation led us to this situation? Raising interest rates reduces consumption only marginally; meanwhile it effects production much more greatly. Is fixed capital investment in the public and private sphere, the only solution for high levels of inflation?