Drupal has strong default caching systems, but the Boost module offers significant improvements.

Boost creates a cache in the file system rather than the database, so Drupal never needs to commuicate with the database. This provides major a performance and scalability boost for sites that receiving mostly anonymous traffic (it doesn't help so much with logged-in users). 

Boost will cache and compress your site's HTML, XML, Ajax, CSS and Javascript. There's also a built-in that will regenerate pages once they are marked as expired.

Boost isn't always this easiest module to set-up, but this video will help you get started.