Utilising inputs from economic researchers, the Monetary Policy Committee deliberates on issues and after thorough debate takes a decision. Next we have to implement those instrument changes. With operational  BIS Review 13/2003  3  departments that are well-geared, this element of monetary policy is usually quick and clean. But then, of course, the economy has to respond to the new instrument settings.
Actual investment and consumption decisions that are based on mental accounting3, present bias4 and reference point consumption5, have been recurrently mentioned as possible explanations for “non-traditional” agents’ behavior that is found in the data. We at the Bank of Italy and IVASS (the Italian regulation and supervision authority for insurance), in our consumer protection activity, consider now attentively the insight of behavioral economics.