It is flexible, easily reversible, and general in scope. If monetary policy is allowed to perform this function, then there will not be inordinate pressure on other, less appropriate, instruments and policies. But let me be clear: this is not to say that we should use monetary policy to allow us to avoid taking the necessary steps on the other three fronts.
Using a conservative real discount rate of 5 per cent, the cumulative present value of this better performance is equivalent to more than 35 per cent of GDP, or € trillion for Germany. 10 Some in Canada argue that our sound financial system implies that the potential gains are small for our country and the G-20 reforms are, therefore, unimportant. This is misguided.