They focus on a combination of the future increase in monetary base and the current positive long-term interest rates. The latter indicates that market participants expect short-term interest rates to become positive in future. Eggertsson and Woodford (2003) as well as Bernanke (2003) proposed the third prescription.
If the deterioration in inflation expectations were to continue, it would be a cause for concern given the critical role of expectations in the price and wage formation process. The economy has continued to grow at a robust pace, with quarter-on-quarter annualised real GDP growth accelerating from 3,5 per cent in the first quarter of 2005 to 4,8 per cent in the second quarter.