Strong forms of the secular stagnation hypothesis would argue that an interest rate adjustment is ineffective in inducing an inter-temporal shift in demand when consumers and investors anticipate, let alone experience, near-zero long-run interest rates.
The target for 2003 was kept unchanged at an annual average rate of increase in the CPIX of between 3 and 6 per cent, but this range was lowered to an average of 3 to 5 per cent for the next two years. This clearly reflected government’s commitment to the adjustment of policies to bring the inflation rate down to lower levels.