•  In similar vein, there are limits on punishment levels: one being that there is limited liability so that employee’s pecuniary reward even in the bad-outcome scenario can only be positive (d < 1) even if it is lower than the reward in case of the good outcome; further, there may be lower bounds on the bad-outcome reward as the institution may be constrained by (un-modeled) side-effects such as the costs of dealing with grievance redressal and legal recourse being undertaken by the employee in case the punishment for low-outcome scenario being realised is too severe.
As the output gap has been maintained within positive territory -- showing excess demand -- for a long time, in reflection of economic expansion, many of the aforementioned factors that have been constraining inflation will likely be resolved gradually.