We are conducting research specifically on financial imbalances in the household sector to determine the best way to minimize the risk of future crises. We are developing models that will do a better job of quantifying the costs and benefits of using monetary policy to combat the build-up of imbalances.
Said differently, it may be worthwhile to temporarily tolerate small deviations from the 2 percent inflation target if this yields large gains with respect to financial stability. 11.