On the other hand, policy B might be somewhat less effective in advancing the policy objectives under the assumed baseline model but might be relatively benign in the event that the structure of the economy turns out to differ from the baseline.
The health crisis has considerably altered our near-term growth narrative. In the first quarter of 2020, real GDP declined by 0.2 percent with full-year GDP projected to contract between 2.0 to 3.4 percent. Meanwhile, latest baseline forecasts indicate that inflation could settle at the low end of the government’s target range of 2.0 percent to 4.0 percent.