Second, because key variables that are crucial inputs for conducting monetary policy—such as r*, u*, and expected inflation, to name just three—are both unobserved and time varying, responsible monetary policy requires informed views about how these variables evolve over time as well as a humility and an appreciation for the uncertainties surrounding baseline views, however well informed they might be.
Nonresidential construction is likely to lose some momentum in the wake of both weak growth in overall economic activity and tighter credit. Some modest offset to these areas of weakness should come from export demand, which  BIS Review 23/2008  5  should be boosted by the lagged effects of recent declines in the dollar and supported by still-solid growth abroad.