Thus, the expectation is for more real wage catch-up to occur in 2023 and 2024, but real wage growth to be negative in the short-term.
Some countries turned to inflation targeting because the instability of money demand in the face of ongoing financial innovation appeared to render the application of textbook-type versions of monetary targeting unappealing. Even so, inflation targeting was heavily influenced by the monetarist view that monetary policy can control inflation. The second development was the establishment of the ECB, with its two-pillar monetary policy strategy.