However, over short and medium-term horizons, the effects on future price and output developments of a change in the monetary policy stance, and of monetary conditions in particular, cannot be settled a priori on theoretical grounds. The magnitude and time profile of these effects is an empirical issue that must be assessed on the basis of the evidence available.
But as the response of the economy to a change in policy rates and/or the quantity of base money reflects the influence of various factors and past policy actions that may have varied over time, and are likely to differ across countries, the estimation of these effects is not straightforward, especially for relatively low rates of inflation.