Permanently low inflation is a necessary means of achieving growth and employment sustained into the medium and long term.’2 I totally agree. The control of inflation, and output variability Most of us now accept that monetary policy can not, by tolerating a little more inflation, buy sustainably faster growth.
In other words, keeping inflation low is the best contribution which monetary policy can make to growth in the longer term. But it is also widely accepted that there may be a trade-off between the variability of inflation and the variability of output.