______________________________________________________________________________________ 20221108 ICMB Public Lecture Pierre Wunsch – National Bank of Belgium Page 2 of 11  More generally, supply shocks with persistent effects could well require a stronger monetary policy response if they contribute to a de-anchoring of inflation expectations.
Indeed, the longer inflation persists, the greater the risk of people learning to live with it and adapting their behaviours in ways that perpetuate it. Under such circumstances, decisive monetary policy is required to prevent self-fulfilling prophecies and coordinate target expectations.2 As inflation remains stubbornly high and is testing expectations, the role of models in policymaking is being called into question.