BIS Review 51/2006  3  A point that should be emphasised with regard to the appropriate response of monetary policy to supply shocks is that their ultimate effects on inflation and output dynamics will obviously and crucially depend on the reaction of economic agents, especially of the participants in product and labour markets, which is influenced by their expectations about the response of the central bank to such disturbances.
The fact that no significant second-round effects have been observed in the recent past does not imply that they will not emerge in the future, if an accommodative monetary policy is maintained, especially as the economic recovery gains momentum.