On the contrary, inflation risk premia diminish as inflation uncertainty diminishes, and nominal interest rates decline as low inflation becomes firmly anchored in expectations. This is illustrated by the fact that the real long-term interest rate in the euro area countries (EMU12) has been 2.4% since 1999, compared with 4.7% in the period 1989 to 1998.
2  BIS Review 108/2008  Inflation and inflation volatility by decade EU12 % p.a.