Even as these protectionist tendencies have seen some resistance, public policy has become less certain on the whole. This tension has cast a heavy cloud over global economic prospects. Indeed, the rise of protectionist pressures reflects a growing belief among countries that the benefits of growth need to be shared more equally and equitably.
How does inflation targeting help in the context of today's global economy? First of all, by reducing uncertainty about the future value of money, a climate of low and stable inflation maximizes the clarity of signals that are sent by prices. This helps businesses to make appropriate investments.