Central bank forecasts played a key role in monetary policy decision-making, with monetary aggregates increasingly taking a back seat in many forecast models. Furthermore, capital markets were mostly assumed to be efficient, meaning that financial imperfections and their potential macroeconomic effects were not taken into account.
1  See A A Weber (2007), From Academic to Policy Maker, CEPR-CEPREMAP Lectures on Policy Making, Paris, 29 May 2007. 2  See C Bean, M Paustian, A Penalver and T Taylor (2010), Monetary Policy after the Fall, Jackson Hole 2010 Symposium Proceedings, Federal Reserve Bank of Kansas City.