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At the same time, Greenspan also admitted that an economic transformation caused by technological innovation made it difficult to implement effective monetary policy, and that it was not clear how much effect interest rates were having.
From this sort of broad understanding may someday come more effective monetary policy.
The BIS cites imbalances as obstacles to effective monetary policy while acknowledging that by pushing unconventional monetary policy further central banks can impact aggregate demand.
O.K., I don't mean that Mr. Perry, the governor of Texas, is personally standing in the way of effective monetary policy.
"Understanding the labor market — and the process by which workers and jobs come together and separate — is critical to devising an effective monetary policy," he wrote.
"I hope that the Bank of Japan will continue to pursue a bold, timely and effective monetary policy," he told a parliamentary committee.
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(Although Sweden and Switzerland have had effective monetary policies recently, both of those countries have especially high rates of trust in government).
He urged governments urgently implement reforms, saying, "the more they do, the more effective our monetary policy will be".
At present fiscal policy is generally seen as less effective than monetary policy in steering the economy.
The PBOC's data suggests an effective tightening monetary policy while the Fitch report implies the opposite, raising question about the efficacy of PBOC policy.
It is also the only way for the European Central Bank to conduct an effective and responsive monetary policy, as does the US Federal Reserve (which would also be hard pressed to do its job properly if every morning it had to arbitrate between the debts of Texas, Wyoming and California).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com