MP_responses

But we wanted to get policymakers from the institutions to write up while it was still fresh, the issues that they faced and the decisions that they made and why they made the decisions that they made. [...] So if you're in the business of estimating models and you have an event that wasn't something that happened during the period that you were using the data that you were using to estimate your models, it's not surprising that you missed that. [...] I think the problem was that large enough and a long enough series of shocks like the ones that we saw in the end do undermine that confidence and they cause bigger inflation problems. [...] And in that case, if you thought policy like that maybe was in the wind, then providing a scenario that would say, yes, inflation is high, but these sorts of fiscal policy tools could suppress inflation, at least for a while, and what would that look like? That seems like a potentially useful tool, again, just to try to explain to the public how the central bank would respond in different circumst. [...] I think it was helpful in the UK that they had a monetary policy committee and a financial policy committee, and they could say this decision to become market maker of last resort for a while is a financial policy committee decision.