Second, changes in monetary policy could conceivably affect the size and frequency of shocks hitting the economy, at least as an econometrician would measure those shocks. This assertion seems odd at first, as we are used to thinking of shocks as exogenous events, arising from “outside the model,” so to speak.
About a decade ago we seemed to be well on the way to creating a platform for a strong non-energy economy. You will all recall that coming out of the collapse of the first oil boom, successive governments introduced a range of macro-economic and structural reforms that set the stage for the current economic expansion.