To conclude in the spirit of this forward looking conference, I would draw 3 points from the recent Israeli experience. First, protracted periods of below target inflation do not entail an automatic loss of monetary policy credibility.
For the latter to be maintained, we need to better understand, and better explain, how the transmission mechanisms operate – through short term interest rates, long term rates, exchange rate and asset prices. This will lead us to use more tools and more targeted tools when available.