But benchmarks are a very critical part of the plumbing of the financial system. It is important that market participants have a reasonable awareness of how they are calculated rather than simply taking them for granted. But even more importantly, market participants need to have confidence in their robustness and integrity.
The environment in which monetary policy operates has changed in recent years. The natural real rate of interest has declined to 0 % or even lower over the past two decades in both the US and Europe. Phillips curves have become considerably flatter in this period. Several structural factors underlie this diminished relation between inflation and economic activity.