But in the event of expansionary wage-rate policy and of structural rigidities on the labour market, the academic argument that higher productivity automatically implies greater price stability does not hold good any longer.
And fourth, even if a tendency towards greater stability were durably to take hold in the nonmonetary field (something we do not know), that would not release monetary policy, for its part, from its obligation to keep the monetary side in order. For overly expansionary monetary growth always poses a threat – both to price stability and to the stability of the financial markets.