I have concentrated on how we have tried to identify and analyze new developments, and endeavored to use that analysis to fashion and balance policy responses. I have also tried to highlight the questions about how to specify and measure the ultimate goals of policy. Nonetheless, all of us could easily add to the list.
In both cases, there would be much more short-run volatility in interest rates than exists at present. This is because the day-to-day fluctuations in the Government’s position, which can be quite large, would no longer be smoothed out by Reserve Bank open market operations.