This can be explained by factors such as the increased credibility of monetary policy in countries pursuing price stability, and also the expansion of supply of low-priced products flowing into the global market as a result of entry of emerging countries. Long-term interest rates remain at low levels in major economies as a result of stable prices and accommodative monetary policy.
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.