The necessary reforms to social safety nets and to liberalize the domestic financial sector are complex and will take years to bear fruit. They must also be complemented by material adjustments to the real exchange rates of deficit and surplus countries. Reaffirm In the face of these challenges and uncertainties, the credibility of macroeconomic policy is essential.
As former Chairman Paul Volcker put it at the height of the Great Inflation in 1979, "Inflation feeds in part on itself, so part of the job of returning to a more stable and more productive economy must be to break the grip of inflationary expectations.