Over the past two decades, monetary policy has succeeded reasonably well in curbing inflation, thereby enhancing the predictability of the macroeconomic environment. The risk that a cyclical boom will trigger a wage-price spiral has also diminished. As for budgetary policy, the 1960s and ’70s were characterised by activism, which served to magnify rather than damp cyclical movements.
The Versailles declaration was issued at the end of the informal meeting of the Heads of State or Government held on 10 and 11 March 2022 in Paris. 14. See “Public Investment for the Recovery”, Fiscal Monitor, International Monetary Fund, October 2020. 15.