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Economic Viewpoint

Low, Stable and Predictable Infation Is Still a Winning Strategy in the Long Run

June 29, 2021
Hendrix Vachon
Principal Economist

In economics, as in life, sometimes hard choices have to be made. Central banks must once again choose between promoting strong job creation and curbing inflation. If the pandemic continues to slow, the economic situation will improve further and the unemployment rate will drop. At the same time, new inflationary pressures are expected to emerge, but the problem is that in some countries inflation is already exceeding established targets. This is forcing several central banks to adjust their interventions, or at least to think about it. The labour market recovery may be slowed down, but economics has shown that letting inflation run is not a better option.