If the internal imbalances are not re-balanced immediately, the correction may evolve through external forces and may be painful and costly to all stakeholders. The focus, therefore, should be on enhancing and fortifying operation of the principles of sound corporate governance.
Hence, every attempt to fine-tune the economy bears the risk of policy errors with the corresponding negative effects on price stability. In my view, and that’s my second point, the more recent research on data uncertainty supports the principle of a cautious monetary policy approach (“steady as she goes policy”).