And to those of you who are from abroad, a warm welcome to South Africa. It is difficult to imagine that twenty years ago it was unlikely that a conference on communication would be held in a central bank.
At the other end of the spectrum are policymakers who suspect that most firms and households form their expectations using something closer to simple rules of thumb based on recent history. Under this alternative worldview, a string of adverse supply shocks is dangerous because it has the potential to cause rising inflation to become embedded in expectations.