Fiscal prudence and stable inflation rates are cornerstones of today s relatively healthy global economic environment.

So, what should be done? First, politicians, or central bankers, should not be blamed for imported inflation, just as we should not give them credit for low inflation when the global environment is benign.

Today s low interest rate environment is causing a flood of financial flows to emerging economies, raising the risk of inflation and asset bubbles.

Now, in a low inflation environment, flexibility is properly regarded as an important tool to avoid misalignments and to shield economies from external shocks.

Some central banks began to raise interest rates pre emptively, albeit in small steps to counter the risk of potentially higher inflation in 2005, signalling the end of the low inflation, low interest rate environment of the last two years.

With little wage inflation, high goods inflation is unlikely.

Inflation!

Start with the question of whether central banks that have spent decades establishing and maintaining anti inflation credibility can generate faster price growth in an environment of low interest rates.

And core inflation measures show no sign of accelerating inflation either.

Forget Inflation

In other words, the low inflation era will become the lower inflation era.

Beyond Inflation Targets

The Inflation Puzzle

Rethinking Inflation Targeting

Asia s Inflation Trap

China s Inflation Muddle

Inflation or Deflation?

Is Inflation Returning?

Russia s Eternal Inflation

An Inflation Reality Check

Inflation Comes to China

Is Inflation the Answer?

Farewell to Inflation Targeting?

The Bogey of Inflation

Everyone expects some inflation.

When Inflation Doves Cry

Inflation is under control.

And, as India s external position deteriorated, the rupee became significantly overvalued between early 2009 and late 2012, trading in a narrow range while domestic inflation galloped ahead in a global environment of relative price stability.

Naturally, the major central banks are concerned with the inflation that they can control homemade inflation.

By contrast, inflation hawks argue that inflation must be attacked preemptively. While most central banks are inflation hawks, this stance is a matter of religion, not economic science.

In this sense the environment may refer to the biophysical environment, the natural environment or the built environment.

During the low inflation era, which dates from the early 1990 s, developed country annual inflation rates averaged 2.4 . Central bank inflation targets are now normally set at 2 .

A new macroeconomic environment should be created that is capable of autonomously adopting an economic policy with a low rate of unemployment as its main objective, a more important objective than the mere prevention of inflation.

Headline inflation numbers are the only indication that rising inflation is a problem, or even a reality.

The Exaggerated Death of Inflation

The US was exporting inflation.

The Inflation of Hugo Chávez

Is Inflation the Right Battle?

The Failure of Inflation Targeting

The Ghost of Inflation Future

Inflation and unemployment remain rampant.

Inflation and other cost adjustments

On 17 April 2007, CPI inflation was reported at 3.1 (inflation of the Retail Prices Index was 4.8 ).

Naturally, the major central banks are concerned with the inflation that they can control homemade inflation. But this neglects global inflation driven by rising commodity prices, which has been increasingly evident.

With good communication policy, inflation expectations can be contained, and inflation can be brought down as quickly as necessary.