Actually that link quite interesting. Forward guidance (signalling that you intend to create inflation) can create inflation if people feel it is credible. Unfortunately, committees tend to result in compromise decisions in the face of uncertainty, rather than decisive action and further than that, it is harder for a committee to credibly commit seeing that the members don’t know whether other member will keep their support up over time. So it’s actually really hard for a committee to implement.
Actually that link quite interesting. Forward guidance (signalling that you intend to create inflation) can create inflation if people feel it is credible. Unfortunately, committees tend to result in compromise decisions in the face of uncertainty, rather than decisive action and further than that, it is harder for a committee to credibly commit seeing that the members don’t know whether other member will keep their support up over time. So it’s actually really hard for a committee to implement.