This generally accepted fact of monetary policy seems to have been overlooked somewhat in the period of the “great moderation”, when globalisation kept inflation down for quite some time. I would, in fact, like to go one step further: Central bankers can never afford to sit back and relax – even in periods of low inflation.
While China has endeavoured to learn the lessons from all the other countries that have gone down this path, including Australia, it will be a significant achievement if they are able to pull it off without encountering some problems.