By Richard Robb
What should investors in developed countries worry about — inflation or deflation? Evidence from the past two decades suggests the answer is “neither.” Progress in monetary policy may have rid the world of price instability once and for all; like smallpox, Germany military aggression or the spread of orthodox Marxism, inflation could well turn out to be last century’s problem.
As recently as the 1990s, France, UK and Italy pegged exchange rates. The US and UK targeted money supply in the late 1970s and early 1980s, while the Bundesbank targeted Germany’s money supply right up until monetary union. Read more