However, the intuition that more flexibility is always better than less flexibility is quite fallacious, a point understood long ago by Homer, who told of how Ulysses had himself tied to the mast so as not to fall victim to the songs of the Sirens.
The analysis also highlights the important role of fiscal policy in ensuring price stability in the face of adverse supply-side shocks. 19. This effect may be compounded by the absence of “creative destruction” during the crisis and increased spending on making supply chains more robust rather than more efficient. 20.