The upshot of these, and other, changes is that the economic world in which we function is the best described by a structure whose parameters are constantly changing, helping to explain why the predictions of the models about the effects of the most-recent oil price shock have been off the mark.
The challenge for the monetary official is to operate in a way that does not depend on a fixed economic structure based on historically average coefficients. These lessons have been enshrined in the new institutional environment of monetary policy-making that spread throughout industrial countries during the 1990s.