Global economy must start bracing for low inflation, says Raghuram Rajan

The global economy could go back to a low inflation regime and central bankers pursuing restrictive monetary polices should keep that in mind, said Raghuram Rajan, a former governor of India’s central bank.
 

Central banks must ask themselves if their policies were nimble enough when inflation shifted from low to a high regime, said Rajan who’s now a professor of finance at the University of Chicago Booth School of Business. “We should be prepared to potentially go back to low inflation regime,” he said Friday in a conference organized by the Bank of Thailand and the Bank for International Settlements.