Even in this environment, fears of too high inflation are unfounded. In the most benign scenario, inflation in the euro area over the coming years would very likely remain well below the levels that threatened price stability, and hence welfare and social cohesion, in the 1970s and 1980s, largely thanks to the stability-orientated policy frameworks of independent central banks.
But the freeing of markets over the previous quarter-century had imparted a flexibility and, hence, a resilience that enabled cross-border commerce to quickly stabilize and, by early 2002, to resume its expansion. Despite the worrisome pockets of strife and destruction, commerce and wealth building continue apace.