Models too are needed to capture the complexities of the real world. But these are not sufficient. In making economic decisions, practical policy makers need to superimpose judgement on the inferences thrown up by analysis and models.
I want to illustrate this by presenting to you the rationale behind the Reserve Bank’s calibrated exit from the expansionary monetary stance of the crisis and the policy dilemmas that we confront. Calibrated exit from expansionary monetary stance 29.