He recounts, "[T]o the man with only a hammer, every problem looks pretty much like a nail." 3 I suspect Munger feels similarly about the orthodoxy of monetary policy. Consistent with Munger's admonition, the Fed saw it necessary to expand our toolkit beyond the proverbial hammer of the policy rate in the last nine months.
The dynamics in 2013 also taught an important lesson about the role of structural reform in sustaining economic growth. Without effective structural policy, an external shock would always require substantial adjustment in the demand side that will only intensify boom-and-bust cycle in the economy. Economic outlook and risk Ladies and Gentlemen, 19.