On the other hand, frameworks that have a degree of flexibility, that can bend with the circumstances but retain their essential integrity, like an aircraft wing in turbulence, stand a reasonable chance of coming through. I think the inflation target as we have operated it has the requisite degree of flexibility.
The irony is that when we first started talking about inflation targeting, it was our insistence on that very flexibility that made people think we weren't serious. The 2–3 per cent was not a hardedged band. We were not promising that the Governor would be sacked, or have their salary reduced, if the target was missed.