In fact, recent circumstances, most notably the negotiations on access for our bananas into the European Union clearly indicate that our small size does not evoke much sympathy in international economic relations. This should make it abundantly clear to us that we need to proceed into the future with an increased sense of realism, objectivity and clarity.
Conversely, in 1979, with inflation threatening to get out of control, the cost to the economy of a major withdrawal of liquidity was judged far less than the potential long-term consequences of leaving accelerating prices unaddressed. 2  William Brainard, “Uncertainty and the Effectiveness of Monetary Policy,” American Economic Review, May 1967, pp. 411-25.