A small positive inflation rate may "grease" the real adjustment if workers show resistance to nominal wage cuts. According to more recent evidence, however, the importance of downward nominal rigidities in the euro area is limited (trend towards flexible wage  2  BIS Review 24/2003  components; likely to decline in sustained low inflation environment and/or with structural reforms; positive trend productivity growth).
If downward nominal rigidities were pervasive, it is unclear whether monetary policy should accommodate them in the setting of the policy objective since this could make them even more 'entrenched'.