Corporate profits and sentiment continue to improve, and the number of firms that take positive action, such as increasing the amount of fixed investment, is increasing, especially in high-growth sectors.
Faced with these deflationary threats, central banks responded decisively with conventional policy, but they eventually ran into the lower bound on interest rates. This required them to adopt new, unconventional measures, such as largescale asset purchases, to stabilise inflation. The new environment of low inflation and unconventional policies has led to questions about the key tenets of the pre-crisis monetary policy consensus.