In some countries, when troubles arrived, governments felt that they had little choice other than to impose austerity measures to restore the fiscal accounts, despite the fact that these measures added to the immediate downturn in the economy. Australia, again, provides a counter example.
Monetary policy formulation is an ever evolving process both in response to and as a consequence of changes in the financial markets and the real economy. This is a phenomenon we have observed in India in our monetary policy formulation over the years.