My submission is that central banks in particular, and regulators in general, could be more proactive in promoting and incentivising appropriate innovations in the financial sector, and drawing on the experience of other industries may be of considerable value in evolving policies towards financial innovations.
In other words, the dual mandate recognises that in the long run, the highest cyclical employment rate is consistent with low inflation. In the policy debate at present in the US, there may be a rise in cyclical unemployment to get inflation back down and to achieve a lower sustainable unemployment rate. 11 See Kabundi, Schalling and Some (2016) and Botha et al. (2020).