By contrast, in the 1970s, survey expectations moved up sharply and remained elevated in the wake of the two oil shocks. Indicators of long-term inflation expectations did not exist in the 1970s, but in the current period, the stability of these expectations has been remarkable.
Furthermore, the target itself is set within a band or range in acknowledgement of potential supply shocks that well up outside monetary policy’s realm. Accountability for failure to ensure the inflation band is generally defined, but after taking into account the various lags characterising the operation of monetary policy.