The world entered the "Great Moderation". The Bank of England said we were living in a unique time: "NICE": Non-inflationary Continuous Expansion.
Inflation is now largely forgotten (except among elderly economists). But with the onset of COVID expenditure programmes a new economic crisis could be emerging.
The US and other governments are back to Keynesian thinking and they have learned from the 2008 GFC. Huge government expenditure is underway.
Australia has very low interest rates to protect economic growth but this has led to a housing bubble. In economic life, one problem is "solved" at the cost of creating another one.
At some point, the Australian Reserve Bank may start to fear the onset of inflation above the target (of around 2%) and increase the interest rate, thereby adding to "mortgage stress". The Bank's Dr Lowe still reckons that won't be before 2024.
Managing debt and paying for all the COVID programmes will be a chief worry for Australian governments for many years to come (and there will probably have to be expenditure cutbacks and so more social dislocation).
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