In both monetary and ﬁscal policy, there are incentives for policymakers to announce a certain course of action today and deviate from it tomorrow. For example, the government could announce to seek price stability, but then trade it off for lower unemployment in the short run by creating surprise inﬂation. Of course, people might be fooled once or twice, but not all the time.
Mario Draghi: Monetary policy in a prolonged period of low inflation Speech by Mr Mario Draghi, President of the European Central Bank, at the ECB Forum on Central Banking, Sintra, Portugal, 26 May 2014.