However, in terms of income distribution, I believe that in the final analysis, the policy rate reductions supported household sector income: although they lowered households' interest income, thereby restraining consumption to some extent, the policy rate reductions facilitated the adjustment process in the corporate sector and supported economic activity overall, thereby propping up household sector income from employment and hence the economy.
This lesson was clearly brought home during the Asian crisis of 1997-98. Many Asian countries, but also countries like Canada that are particularly vulnerable to sharp fluctuations in commodity prices, made relatively quick adjustments to a difficult situation through the floating exchange rate mechanism. How does this relate to trust? Through the need to trust in market forces, I would say.