Policymakers are likely to jettison their 2% inflation targets

THE LAST time rich economies conquered inflation it ushered in a decades-long era known as the “great moderation”. From the mid-1980s to 2007 growth was steady, inflation was low and economists celebrated their own “end of history”: the triumph of inflation-targeting technocracy over the naivety of 1970s policymaking. The economy was steered by a simple division of labour. Central banks would use monetary policy to keep inflation on target—typically at 2%—while governments would keep debts under control and focus on supply-side reforms.