  Second, rely on your best model of the economy, even if it does not integrate or just assigns a trivial role to a host of variables, particularly money and credit, which are assumed to adjust to the state of the economy.
  Third, follow the best policy implied by the model and set the policy instrument so that inflation forecasts – whatever the nature of the shocks that might have caused them – are stabilised, and output volatility is minimised, at a pre-set horizon. 4  See Blinder and Reis (2005). 5  See e.g. Rajan (2005).