Today, by contrast, even those who criticised the commitment to low inflation initially are persuaded that low inflation is likely to be around for a considerable time to come. Businesses no longer assume that they will be able to increase prices more or less automatically each year. Consumers no longer assume that they must buy this month because next month prices will be higher.
Those negotiating wage and salary increases strike agreements consistent with stable prices. Long-term interest rates are nearly back to their levels in the sixties. Even home-buyers are beginning to realise that house prices go down as well as up.