This has, in fact, been one response that many, including myself, have taken in response to recent developments. In following this approach, policymakers would become less responsive to declines in the unemployment rate, to the extent that estimates of the NAIRU are revised downward as unemployment and inflation decline together.
It would have been wonderful if Mr. Hansen had made use of his teaching skills, which involve the ability to get things across with ease, to remind us that in the marathon distances – in our case, approximating the level of European standard of living – sprinter’s tactics are of no use.