All of this communications work is designed to strengthen the credibility of the inflation target and thus both to increase the likelihood of achieving the target and to minimise any social cost in doing so. Secondly, having an explicit inflation target provides a very useful discipline on the Reserve Bank itself, and helps considerably in keeping our deliberations focused.
I have been at the Bank for little more than 10 years, during all of which time we have had an inflation target. But I am told by those of my colleagues who remember the days before we had an explicit inflation target that prior to the introduction of that target monetary policy discussions, and decisions, were very much more difficult.