Ultimately, we would achieve natural, balanced growth, with exports representing a larger share and inflation sustainably at its 2 per cent target. Exports began to recover after the recession but stalled in 2012 and 2013, despite strong U.S. growth.
Thornton distinguishes between nominal and real interest rates, taking into account changes in inflation  10  expectations.14 His account of changes in inflation expectations was later taken up by Irving Fisher, while his two-interest-rate analysis was later adopted by Knut Wicksell; both form the theoretical basis of modern macroeconomics.