In addition, greater central bank credibility has allowed the development of long-term bond markets in many countries and flattened yield curves around the globe as concerns about future inflation risks have declined. Deeper bond markets with a wider range of available maturities encourage long-term planning and investment and thus convey lasting gains, particularly in emerging markets.
The important issue is whether the reduction of worldwide inflation will persist or be a temporary phenomenon. The worldwide decline in inflation From the 1950s until the late 1960s, inflation rates were relatively contained, and episodes of high inflation were rare. Then, especially following the early-1970s collapse of the Bretton Woods fixedexchange-rate system, inflation became a worldwide phenomenon.