PARIS -- High inflation, the bugbear of the 1970s and '80s, is ancient history, and the world has actually entered a period of long-term disinflation.
A number of international economists are advancing this view. They say Western governments that persist in regarding inflation as the main enemy to sustained recovery are living in the past.
U.S. Federal Reserve Chairman Alan Greenspan suggested Wednesday that short-term interest rates may have to be raised again to stem inflation because America's economy has continued to grow faster than expected.
On the same day, the British government boosted its interest rates by half a percentage point against what it claimed was mounting pressure on prices from accelerating expansion.
France, Germany and several other European Union countries have warned they might start to raise rates again to keep a grip on inflation despite the fact none of them has so far experienced more than a modest and extremely uneven recovery from the slump.
In the United States, Sen. Connie Mack, R-Fla., soon to become chairman of the influential Joint Economic Committee of Congress, went so far last week as to call for a law requiring the Federal Reserve to make fighting inflation its first priority. Now, the emphasis is supposed to be on policies promoting full employment.
But the European experts who downplay any danger of surging inflation say the stress on holding it down is likely to prove unnecessary because of new factors that are changing the whole nature of the global economy.
"Like the French generals at the outset of World War II, most governments and central bankers are one war behind," says French economist Rene Laurier. "They are fighting the wrong enemy."
Having failed to foresee the havoc that double-digit inflation would sow in the '70s and '80s, government officials have now become "obsessed by an inflationary threat that they see around every corner, but which in reality is largely imaginary," Mr. Laurier adds.
In a new book, he predicts that rising productivity and continuing, relatively high unemployment in most advanced industrial countries are setting the scene for a prolonged period of stable, even falling prices.
"We may well be entering an age of unchanging prices similar to the period from the end of the Napoleonic wars in the early 19th century to the start of the World War I in 1914 and for some of the same reasons: competition from newly industrialized countries and the existence of a large reserve of available labor," he asserts.