Here are some lessons we have learned to help you do that. The first lesson has to do with Arthur Burns’ problem, which is about losing track of your mission and living to regret it. Perhaps the most common criticism of inflation targeting, over the past two decades, has been that South Africa needs a more growthfriendly monetary policy.
Burns, however, learned the hard way that there is no permanent gain to growth from short-run increases in inflation. While we would all like South Africa to reach permanently high growth, this is beyond the powers of a central bank. As we have often communicated, most of our growth problems should be addressed through structural reforms and confidence-boosting measures.