Therefore, monetary policy in catching-up countries – unlike that in advanced economies – must also foresee and take into account price convergence patterns in the long run and this is a challenge that still lies ahead of us. The years that passed since the adoption of inflation targeting in Romania were quite out of the ordinary. Until 2008, we had witnessed an economic boom and widening macroeconomic imbalances amid large capital inflows, only to move towards the subsequent bust in 2009 following the outbreak of the global crisis, with the plethora of problems related to correcting domestic and external imbalances. Over the last years, our economy has come a long way, and is now better prepared to deal with external shocks than it was at the beginning of the crisis. It seems that the “light” version of inflation targeting has been working fairly well for a catching-up economy as Romania, providing a combination of rules and flexibility to overcome such trying times. Of course, a coherent macroeconomic policy mix is needed to maintain the economy on an upward course without putting at risk the hard-regained balances. In general, irrespective of how well-designed the monetary policy may be, in the absence of adequate complementary policies, it is likely to achieve sub-optimal outcomes. I would like to end by trying to answer, based on my experience as a central banker, two simple questions related to inflation and real convergence that concern not only Romania, but also other catching-up economies.
With regard to inflation, one may ask “how much is too much?”. I  believe that the answer does not lie in pinning down certain numbers, but in the commitment to maintain a relatively low and stable inflation in the medium and long run. Experience has taught me that inflation is an insidious disease that should not be treated carelessly. With respect to real convergence, a question raised by many is “how fast is  fast enough?”. Again, I would not look for a certain figure; I would tackle this issue by approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner (a marathoner rather than a sprinter) the opportunity to reap most of the potential benefits, while avoiding excessive risks. Much like the fable about the turtle and the rabbit, which we all know how it ends... Beyond targets and levels, and irrespective of the convergence gap an economy faces or the monetary policy regime a central bank opts for, what matters for both real convergence and price stability (as part of nominal convergence) is the consistency and the sustainability of the effort. In other words, being and staying on the right track. Thank you. 3/3  BIS central bankers' speeches