there was some trade-off between real output and inflation, although we did not think much about whether this trade-off would remain in the longer term;  ·  monetary policy worked through regulation and quantitative controls (which were, it should be said, quite effective in this simple world);  ·  low interest rates were widely regarded as a ”good thing”, perhaps because the number of borrowers was greater than the number of rentiers, but more probably because we thought that growth and investment were in themselves good things, and that these would be encouraged by low, stable interest rates.
It may also be relevant that governments were reluctant to inflict losses on bond-holders, and wanted to borrow more, cheaply;  ·  there was not too much concern about international integration, particularly in the capital market.