We continue to believe that this regime has served us exceptionally well, in both turbulent and tranquil times. Nevertheless, we, like many of our counterparts elsewhere, are re-examining key features of our monetary policy framework in the light of recent events. However, we are doing so as part of an ambitious and long-standing research program initiated in 2006.
This research will inform the renewal of the Bank’s inflation-targeting agreement with the government in 2011. A great deal of innovative analysis and research have deepened our understanding of how the macroeconomy operates and helped us gauge the potential costs and benefits of alternative monetary policy frameworks.