Beating inflation blues

For many years, inflation has been quiescent. The combination of prudent monetary policy under inflation-targeting central banks, the effects of globalisation on import prices and wage levels in the Western economies, and gradual improvements in productivity in countries such as Japan and Germany kept price rises and interest-rates low. Today, that phase of the economic cycle is behind us. Strong growth in the world's emerging economies, and the demand for commodities created by this, has pulled the price of agricultural and energy commodities higher. In turn, this is feeding through into...