If the targets then fall, there may easily be more pronounced overshooting. Happily, these four lessons are included in the Maastricht Treaty. They form the foundation for today’s common currency, the euro. First, the Treaty gave European monetary policy the primary target of ensuring price stability.
But for the most part, that range is narrow relative to the actual fluctuations the U.S. economy experienced in the 1950s, 1960s, and 1970s. The fundamentals, such as growth and inflation expectations and underlying financial conditions, appear to support continued good economic outcomes.