Low, stable inflation, it turns out, is entirely consistent with catastrophic economic mismanagement.
And the optimal way to control inflation was to keep it low, stable, and predictable.
Low, stable inflation and strong, steady growth created an incentive for investors to go hunting for risk.
Academic evidence suggests that low, stable inflation expectations are the main difference between today and the 1970s.
Policymakers in economies heavily dependent on external capital can also be tempted to keep interest rates high as they pander to the demands of global investors for low, stable inflation.
It is clear, moreover, that Mr. Bernanke continues to consider low, stable inflation as the single most important contribution that monetary policy can make to long-term prosperity.
Low, stable prices have encouraged some farmers to waste water and to pour it on low-value crops like rice and alfalfa, while others struggle to sustain valuable almond trees.
2. Central banks and other policy makers will be making a terrible mistake if they look at low, stable inflation and pat themselves on the back for a job well done.
"It matters for us because it's our core responsibility to deliver low, stable, predictable inflation of 2%, it matters for the speed rate of the economy and it matters for living standards.
IF YOU were to draw the path of inflation in the typical big, rich economy over the past half century, your picture would look much like a dromedary's back: a low flat line in the 1960s; a knobbly hump of high and volatile price rises in the 1970s; dramatic disinflation in the 1980s; and low, stable inflation rates since.
Using a semi-parametric group-based analysis, Campbell and colleagues (2007) identified low-stable, moderate-stable, intermittent, moderate-increasing, high-decreasing, and high-chronic patterns of depressive symptoms among mothers as their children aged from one month to seven years, with more than 80percentt of mothers in the low-stable or moderate-stable trajectory groups [ 46].
