Import prices in the euro area are partly shielded from the effects of fluctuations in exchange rates in what concerns imports from countries other than the US, given that about 50% of aggregate euro area imports are invoiced in euro. 4  Eichengreen, Hausmann, and Panizza (2005). 5  See e.g. Forbes (2012).
At the same time, low inflation has encouraged Canadian businesses to operate more efficiently and to focus on cost control and productivity improvements. That is quite a change from our experience in the 1970s and 1980s. That experience amply demonstrated what a terrible price the economy and the people pay for high, unstable, and unpredictable inflation.