Expressed in this way, the idea sounds more reasonable, and I think it is fair to say that it pervades some of the commentary that follows interest rate adjustments – the idea that changes in interest rates (and especially increases) should be avoided if possible. We need to be clear that this is an incorrect view, for the same reasons I have just outlined.
If policy were to give too great a weight to stabilising interest rates, as an end in itself, it would risk destabilising the economy, because it would fail to keep up with inflationary or deflationary pressures as they emerge. Of course, it would also be a fallacy to jump to the opposite conclusion, that more interest rate variation is always better.