Responding to risks of instability It is to expectations and the way their dynamics should be factored into policy that I now turn. Why should expectations be a problem within a credible policy environment? Because the economy is never at rest. Agents have to catch up with the continuous change in their environment by an ongoing process of learning.
When shocks are moderate, or the underlying evolution of the economic structure proceeds at a slow pace, imperfect information and learning do not excessively complicate our interactions with the private sector. But there are times in which stormy perturbations and accelerated structural change make uncertainty more acute.