First, each instrument within the policy parcel has a net value that would be diminished if used independently of – and in isolation from – any of the other instruments. Second, the determination of the intentional horizon for applying each of them can only be the result of an integrated decision process whereby these intimate interactions are duly internalised.
Others attempted to use a relaxed monetary policy to cushion the adjustment needs of their economies caused by the oil price shocks. In line with that, there came to be wide differences between inflation rates. Those differences had the following results.