General economic concepts and principles

¶ … company predict the value and impact of inflation, in the context of other economic, social and environmental factors?

A company cannot afford to ignore the impact of inflation in regards to other economic, social and environmental factors because these factors will influence consumer's perceptions of an increase in the costs of living, which includes the prices of goods and services. If consumer confidence about the overall health of the economy is contracting, a small increase in prices may have a seismic effect, as people fear the immanent loss of their jobs, while if consumers are flushed with economic confidence, a larger increase in prices will have less of an effect. Also, fears of war, uncertainty about a change of power from one administration to the next, and changes in technology that can cut future production costs or generate new demand in other sectors of the economy will affect what consumers purchase, and when they make purchases. Finally, the Fed may raise interest rates to curtail inflation, which may make consumers more reluctant to borrow and make large purchases, regardless of consumer confidence.

Do Alan Greenspan's statements suggest monetary policy is ineffective?