World-wide experience, as long back as in the 1970s, provided sufficient evidence that the assumed trade-off of higher inflation for lower unemployment could only be exploited over the limited period in which inflation expectations did not fully adjust to the new higher rate of inflation.
With a more effective implementation of the theory of rational expectations within modern communities, this limited period has indeed become very short. Another reason why the conventional theory of demand management through the application of monetary policy is no longer appropriate is the major shift that took place in recent years in macroeconomic management, away from conventional Keynesian demand management to contemporary supply-side economics.