This situation resulted in: a) unprecedented external indebtedness in some countries, and b) banking institutions with bloated balance sheets supported by very  2  BIS central bankers’ speeches  fragile funding.
Moreover, those two gaps fit directly into most modern macroeconomic theories, which tell us something about their relationship and how that relationship can be affected by the type of shock hitting the economy. Model uncertainties make the simplicity of the rule particularly important for the policymaker because research suggests that the prescriptions from simple rules can be more robust than optimal-control policies.