This relationship is somewhat nebulous but very important and should be viewed seriously with its significance as well as inherent limitations in mind. Secondly, excessive leveraging in any conditions of financial markets is a source of potential instability. Since leveraging is influenced by the cost of financing, the decisions affecting the cost and availability of credit do influence aggregate demand conditions.
6  BIS central bankers’ speeches  targeting, bygones are not bygones and the central bank is compelled to make up for past misses on the path of nominal GDP (Chart 4).