Owing to this, central banks have been able to attain their inflation targets with relative ease and, as a result, enjoyed increasing credibility. A number of problems have arisen due to this global phenomenon of low inflation which we can not overlook.
As seen in major countries over the past few years, central banks have maintained a low interest rate stance for quite some time, based upon the stability of prices. During this period, however, we have seen worsening global imbalances and sharp rises in house prices in many developed countries.