As the new millennium got under way, central banks could congratulate themselves on having slain the dragon of inflation. The goal of a stable rate of consumer price inflation, generally in the 1-3% range, which had scarcely been imaginable a quarter of a century before, had become a widespread reality. No sooner have we grown accustomed to it, however, than we hear mounting concerns about the prospect of deflation.

Central banks beware

Yet only Japan, Hong Kong and, to a lesser degree, mainland