The global atmosphere of low inflation rates

The US, the UK, Japna, the Eurozone and many other countries have very low inflation rates, which are often close to 0. The ECB faces the most difficult problem that it has to make decisions based on the situations of all countries in the Eurozone. The countries in the Eurozone have different economic structures as well as different economic growth rates and inflation rates. The policy made by the ECB affects all member countries; therefore, the decision must be made very considerately. Moreover, the US Federal Reserve also faces its problem. The US growth rate is very positive as well as the unemployment rate. With the thinking of stablisation, the Fed should raise rates to leave room to future expansionary policies. However, the US also has a very low inflation rate, higher interest rates may lead the inflation rate to drop further. Under such circumstances, it is important to justify that how much money is not in our economic circuit. If there is a large amount of money that is not in our economic circuit due to negative predictions, it is important to make policies to put the money back into our economic circuit instead of pulling new money into economies. Therefore, not all expansionary monetary policies are suitable under the current situation, as many expansionary monetary policies have lasted for years but showed limited impacts. These inappropriate monetary policies may start to make effects in the future and cause hyperinflation.