Thursday, 27 September 2012

Measures rather than targets

An interesting statement by Christine Lagarde:

"On the Fund’s part, we are favorably considering that this be done in as timely and flexible a manner as possible: slowing the pace of fiscal adjustment where needed; focusing on measures rather than targets..."

Success of this strategy relies on the level of confidence and consensus on "measures". One possibility is to express the targets in intervals that reflect the uncertainty on "measures". By settling on the level of uncertainty we could gain flexibility and accept the realization of a slower path of adjustment.  

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