They are relevant to the choices made about how quickly to return to target. The role of an inflation-targeting regime for monetary policy in supporting growth can be well illustrated by events in the Australian economy over the past decade or so.
To my mind, there are three reasons why to emphasise risks in monetary policy: •  Firstly, the uncertainties regarding the different channels of the transmission process and its possibly long and varying time lags. In this respect it is very important to understand the functioning of financial markets, including how the private sector perceives risk.