I remember that in 1956 Vocke was asked to comment before a parliamentary committee on the introduction of the index-linked pension. His only sentence was: “I believe it would be a danger to stability to introduce the index-linked pension.” Coming from him, that had to suffice.
Having said this, we are aware that strong money and credit growth may also signal the build-up of financial imbalances and potential price bubbles in asset markets, as could be indicated, for instance, by significant housing price increases in some regions in the euro area. Despite the negative factors mentioned before inflation stood at only 2.2% in 2006.