Third, the credibility of the central bank is higher now than it was in the 1960s and 1970s. Fourth and most importantly, unlike in the late 1960s and 1970s, the Federal Reserve is addressing the outbreak in inflation promptly and forcefully to maintain that credibility and to preserve the “well anchored” property of long-term inflation expectations.
It is stated in line with Danmarks Nationalbank that even if the economy has become more flexible there is still a considerable risk of overheating. Such overheating will, as stated, lead to significantly higher wage increases, and thereby an extended period of low growth. On this basis Danmarks Nationalbank has recommended that demand be curtailed.