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Central banks take account of both in forecasting the future path of inflation.
Instead, the future path of inflation depends largely on the size of the output gap.
Second, households' inflation expectations have been a poor guide to the future path of inflation in the past.
And it will also monitor a wide range of other indicators to assess the future path of inflation.
Similar(54)
And they can guide people's expectations of the future path of interest rates or inflation.
Citing these concerns, several analysts said the Fed was likely to make a more modest shift in its approach, such as publishing a prediction of the level at which it expects to maintain short-term interest rates over the next several years, alongside existing predictions of the future path of economic growth, unemployment and the rate of inflation.
Initially, this is likely to focus on adopting a more flexible inflation-targeting framework, which could include providing more "forward guidance" on the future path of monetary policy (for example, an explicit commitment that rates would remain at 0.5% for a stated duration) and/or threshold rules similar to those recently adopted by the US Federal Reserve.
So as the data changes, the market path of the likely future path of interest rates should change, Carney explains.
But the future path of political reform looks bumpy as well as inviting.
The convention will map out the future path of the resistance, he says.
That, in turn, makes the future path of reform highly unpredictable.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com