Second, monetary policy is too blunt an instrument to counteract asset price booms. And third, a central bank cannot presume to know more than the market. The surmise therefore was that the cost-benefit calculus of a more activist monetary stance of “leaning against the wind” was clearly negative.
It is more cost effective for monetary policy to wait for the bubble to burst and clean up afterwards rather than prick the bubble in advance. The Great Unravelling has, however, shattered the intellectual consensus around both inflation targeting and the Greenspan orthodoxy on asset price build up. The crisis has made  6  BIS Review 95/2009  two things clear.