In this respect I would prefer not to listen to those who are recommending a bias in deciding the timing of the exit, i.e. that it’s preferable to err on the side of late rather than early withdrawal. It’s pretty obvious that a premature exit may undermine the incipient economic recovery. But a belated response can be equally damaging.
This aspect is often underestimated, and rarely studied. Indeed, the later the exit – and the greater the catching-up to be done – the more disruptive the asset price adjustment and the bigger the impact on economic activity.