Output will rise if more production resources are put to work, or where a given supply of labour and capital is utilised more productively. Nowhere does the aggregate stock of money or the aggregate price level form part of the determinants of any production model for sustained long-term economic growth.
In May and June it reached just about 0.5% – far from our medium-term definition of price stability of below, but close to, 2%. Even in Germany inflation has declined markedly. It has hovered around 1% in recent months.