All these arguments show that price stability provides a substantial contribution to economic growth and social welfare. Yet, against the backdrop of relatively low growth rates in Europe, it is sometimes asked whether we could not achieve higher growth rates by accepting a somewhat higher rate of inflation.
History has clearly shown, however, that growth and employment cannot be increased by inflating the economy by means of a loose monetary policy. This means that in the long run an increase in the quantity of money will only lead to an increase in prices, whilst leaving the levels of growth and employment unchanged.