If politicians want to support domestic industries they should do so by increasing the flexibility of labour and product markets through structural reforms, not by interfering with market forces. But let me come back to my original theme – academics and policy-making. When it comes to core monetary policy issues in my current job, my professional background is clearly something I benefit from.
It is these readings and their implications for the future, together with developments in financial markets that could affect activity and inflation, that I will be looking at to judge what policy setting is likely to foster stable prices and sustained growth. 4/4