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Unraveling the mystery of 'missing' inflation

Central banks confront curious case of stronger growth, stagnant prices

Economists are trying to get to the bottom of sluggish inflation in the U.S. and elsewhere.   © Reuters

TOKYO -- A burning question is keeping global economy watchers preoccupied: What explains the increasingly prevalent combination of stronger growth and low inflation? This mystery could have big implications for central banks eyeing the exit from monetary easing.

The U.S. Federal Reserve, for example, has decided to start gradually reducing its assets in October, prompted by solid employment. But while the Fed raised its growth forecast on Sept. 20, it lowered its price projections.

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