There is reason to believe that when the price of oil stabilizes, and U.S. shale oil production reaches its new equilibrium, the overall effect of the decline in the price of oil will be seen to have had a positive effect on aggregate demand in the United States, since lower energy prices are providing a noticeable boost to the real incomes of households. 7.
The lack of competition in some sectors of the economy has also been identified as a constraint to price-setting that is more responsive to domestic demand conditions, and therefore more responsive to changes in the monetary policy stance. Improvements in these areas can help to reduce inflation and create the space for a more accommodative monetary policy stance.