In advanced countries, the lessons learned in previous years led to an increased autonomy granted to central banks and to closer attention paid to inflation expectations and wage dynamics within the framework of (flexible) inflation targeting.3 Even more importantly, globalisation and the strong progress in information and communication technologies (the “ICT revolution”) favoured a solid economic expansion in a low inflation environment.
Economic growth was, of course, not always high,4 not all countries managed to take full advantage of these changes,5 and, most importantly, benefits were not equally shared among households, with many left behind without adequate safety nets; yet, inflation overall was moderate (hence the label of “Great Moderation” usually given to these years). The Great Recession and its legacy.