Please note that the purpose of this estimation is simply to try to examine the effectiveness of monetary easing: judgment about the tax hike is decided purely by the government. For its estimates, the Bank took into account the impacts of the tax increase on household spending (private consumption and housing investment), business fixed investment, and other factors.
Rather, I would like to ask how effectively monetary policy can adjust an extreme swing in expectation and the resultant effects on activity. In this regard, Chairman Greenspan stressed in his congressional testimony in July that monetary and fiscal policy could not eliminate booms and busts in economic activity.