This is in many respects a traditional post-war perspective, when there was a US dollar standard, when the United States as an economic and financial power was unrivalled and all other economies and financial systems were truly small. But of course Asia is no longer small. Countries like the United States or Australia, on the other hand, have a different frame of reference.
Indeed, you can see on this graph that the unemployment rate fell much more rapidly in 1983 and 1984 after peaking at over 10 percent. Second, I will show you data on PCE inflation. Since the beginning of the Great Recession, PCE inflation has averaged only 1.5 percent – well under the FOMC’s target of 2 percent.