18 In fact, partly as a result of that policy preoccupation, the economy expanded strongly through the 1950s and 1960s, and it was inflation, not deflation, that ultimately turned out to be the problem – a problem which then took quite some time (in Australia’s case, two decades) to sort out. That should, if nothing else, make us cautious about long-term prediction.
But the end of the long post-war boom also highlights something else. We can see now that during that period, businesses, wage earners, industrial tribunals and policy-makers gradually adapted their behaviour as they came to assume that the long expansion could continue indefinitely. As they did, they sowed the very seeds of the expansion’s demise.