In effect, there has been a significant shortfall in the overall amount of monetary policy stimulus since early 2009 relative to the prescriptions of the simple rules that I’ve described.
On occasion, sweeping measures may be taken to reduce staff costs; the social repercussions should be cushioned by using existing unemployment and welfare benefits, the resources of the industry’s Solidarity Fund (the scope of which has recently been extended), and those that will be made available by forthcoming legislation.