the bailout ’ s usefulness. thus, a balanced design and effective surveillance mechanisms are crucial. having said that, what is most important is that every individual economy should be committed to making every effort for the stability of its own financial system. first of all, imf ( 2012b ). kim ( 2012a ). hill and menon ( 2012 ). bis central bankers ’ speeches whether financial stability is explicitly included in a central bank ’ s mandate or not, in view of the macro - finance linkage, as the central bank, it needs to prevent the build - up of excessive imbalances in the financial system while not detracting from price stability. additionally, policy makers should measure misalignments in asset prices with alternative indicators, notably economic agent ’ s financial leverage, taking the view that they are one source of systemic risks rather than they should simply be stabilized. based on the results, they need to seek steps such as the use of macroprudential policy to curb the misalignments. furthermore, in coping with highly volatile capital flows, an economy needs to consider capital flow managements 13 which can help lower the proportion of unstable capital flows such as short - term debt and mitigate the boom - bust cycles of capital flows. in today ’ s open global economy, however, the policy effects taken by an individual economy alone can be limited because the effects always spill over to other economies. thus, policy coordination among economies concerned is necessary to ensure the intended policy effect. in this regard, regional cooperative organizations such as the adb, asean + 3, seacen, emeap and indeed this meeting are very important for policy coordination in the asia - pacific region. while we live in a global economy, we know that there is no global jurisdiction. under such circumstances, it is likely that a state of multiple equilibria prevails. good and bad equilibrium can coexist for some time. we may need to remember that an intra - local equilibrium is no more than a “ knife - edge equilibrium ”, which is vulnerable to external shocks and falls short of stability and resilience. 14 in the ongoing eurozone crisis, there has been injection of massive capital in pursuit of intra - regional equilibrium. from the perspective of global equilibrium, however, for the faster recovery of world economy, capital should, by all the principles of economic structural adjustment, flow into economies with faster growth and higher productivity. as pointed out earlier, multiple local

5 i also argued that, if the july and august job reports came in around the forecast values of 800, 000 to 1 million job gains per month, we should commence tapering our asset purchases at the september 2021 fomc see board of governors of the federal reserve system ( 2021 ), “ minutes of the federal open market committee, june 15 – 16, 2021, ” press release, https : / / www. federalreserve. gov / newsevents / pressreleases / monetary20210707a. htm. see board of governors of the federal reserve system ( 2021 ), “ minutes of the federal open market committee, july 27 – 28, 2021, ” press release, https : / / www. federalreserve. gov / newsevents / pressreleases / monetary20210818a. htm. see ann saphir ( 2021 ), “ fed ’ s waller : ‘ go early and go fast ’ on taper, ” reuters, august 2. - 5meeting. the july report was indeed over 1 million new jobs, but then the august report shocked us by reporting only 235, 000 new jobs when the consensus forecast was for 750, 000. i considered this a punch in the gut and relevant to a decision on when to start tapering. 6 nevertheless, the september fomc statement noted that the economy had made progress toward the committee ’ s goals and that, if progress continued, it would soon be time to taper. 7 up until october, monthly core personal consumption expenditures ( pce ) inflation was actually slowing. as shown in figure 1, it went from 0. 62 percent in april to 0. 24 percent for the month of september. the september jobs report was another shock, with only 194, 000 jobs created. so, up until the first week of october 2021, the story of high inflation being temporary was holding up, and the labor market improvements had slowed but were continuing. based on the incoming data, the fomc announced the start of tapering at its early november meeting. 8 it was the october and november consumer price index ( cpi ) reports that showed that the deceleration of inflation from april to september was short lived and year - overyear inflation had topped 6 percent. it became clear that the high inflation realizations were not as temporary as originally thought. and the october jobs report showed a significant rebound with 531, 000 jobs created and