The second, and in my opinion the most important, is the effectiveness of the different monetary policy instruments. In other words, how effective they are in enabling us to fulfil our mandate and what side effects they can have. The third part includes other objectives, like financial stability, and issues like climate change.
[8]  Fiscal policy, then, faces a difficult trade-off between business cycle stabilisation and debt sustainability, in particular in a situation with high legacy debt. This limits the extent to which governments can commit to sizeable expansionary fiscal policies, even if such policies would be optimal for society as a whole. The pandemic has been a stark reminder of this trade-off.