Challenges ahead: crisis prevention What I have so far said concerns crisis resolution. But crisis prevention is equally important from the longer-term viewpoint. Let me sketch this out. First of all, the current crisis presents a challenge for the conduct of monetary policy.
It requires a change not only in policymakers’ way of thinking but also in the theoretical underpinnings on which actual policies have been formulated. In the last two decades, macroeconomics as a professional discipline has evolved with impressive sophistication. If I may put it simply, its implications for policy practitioners might be condensed into three points.