Policy challenges in an unprecedented recovery Fundamental to modern thinking on central banking is the idea that monetary policy is more effective when the public better understands and anticipates how the central bank will respond to evolving economic conditions.
Specifically, it is important for the central bank to make clear how it will adjust its policy stance in response to unforeseen economic  13  See, respectively, Aspen Publishers (2010), Blue Chip Financial Forecasts, vol. 29, no. 7 (July 1); and Aspen Publishers (2010), vol. 29, no. 10 (October 1).