If producers simply pass on these increases, and if wages increase to compensate labour for these increases without higher levels of productivity growth, and if we  2  BIS Review 65/2008  allow this process to take effect, inflation expectations will deteriorate and generalised inflation will accelerate. We cannot simply sit back idly, the stakes are too high.
3  For an empirical assessment of this transmission channel for the US and UK purchase programmes, respectively, see Carpenter, S., S. Demiralp, J. Ihrig and E. Klee, 2013, “Analyzing Federal Reserve Asset Purchases: From whom does the Fed buy?” Federal Reserve Board Finance and Economics Discussion Series 2013-32, and Joyce, M.A.S., Z. Liu and I. Tonks, 2014, “Institutional investor portfolio allocation, quantitative easing and the global financial crisis”, Bank of England Working Paper No.