Both practical experience and theoretical research have however indicated that this does not hold true in the long run. The currently prevailing view is that monetary policy is able to determine the rate of inflation in the long term and that the maintenance of price stability entails no permanent costs in terms of lower economic growth or job losses, for instance.
Research however stresses the importance of a number of price rigidities affecting the economy, which weaken the ability of monetary policy to control short-term inflationary developments and possibly cause interest rate movements to exert even major temporary effects on overall demand and economic growth.