Macroeconomists need to pay more attention to finance sociology. Choke.
Languages have multiple equilibria. If we all used the word "cat" to mean dog, then "cat" would mean dog. And if I walked into a pet store and said "I want to buy a cat", the people in the pet store would react differently to how they react today. They would bring me a dog, not a cat.
The effect of my action depends, in part, on how people interpret that action. What does it mean? Why did Nick say/do that?
Suppose the Bank of Canada targets 2% inflation, using a nominal interest rate instrument. Suppose the economy is humming along in full rational expectations equilibrium, with inflation at 2%, nominal interest rate at 3%, and nobody expects it to change.
Now suppose the Bank of Canada suddenly and unexpectedly raises the interest rate to 4%. But the memo explaining why it did that gets lost. How would people react to the Bank of Canada's action?
The initial reaction would be: "WTF!?"