Also, the great inflation, which has had a lasting effect on perceptions about the value of money, has led to a heightened interest in the conduct of monetary policy. Expectations are not held as firmly as they were in the 1950s and early 1960s. People have had to be convinced in recent years that price stability is a credible objective.
This first mistake is easy; all you have to do is reverse your policy two, three, four months later. The second mistake is harder now that you have fallen behind and maybe lose your credibility. Above-target CPI items on the rise as price pressures broaden If you look at the next chart, you will again appreciate this even more.