Finally, clear communication can help anchor the public’s long-term inflation expectations and hence improve the extent to which the central bank can take forceful actions to promote job creation in a context of price stability. With the federal funds rate constrained by its effective lower bound, effective communications with the public have become more important than ever.
And it is then not clear where to stop. One answer is to move from the BRICs to the non-G-7 members of the G-20.