Therefore, a stabilizing policy is not limited to smoothing consumption volatility, but contributes to the growth rate and to improving per capita consumption. It is important to note that there is “bad” uncertainty, regarding which we must guard stability, but there is also “good” uncertainty, as shown by a study I conducted with Segal and Shaliastovich (2015).
We must maintain stability while enabling that good uncertainty that is reflected in innovation and technological improvements, research and development, and competition. Until now, the discussion has been regarding volatile business cycles. But what about the  significant effect of financial cycles on that volatility? "Financial cycle” is a term that is described and analyzed in the Bank of Israel’s upcoming Financial Stability Report.