Traditional monetary policy practice is based on two mechanisms that have disappeared

In OECD countries, traditional monetary policy practice is straightforward: the central bank pursues an inflation target by conducting a countercyclical monetary policy: in growth periods, when unemployment is declining, monetary policy becomes more restrictive to combat inflation ; after a lag, the tightening of monetary policy pushes down inflation. But one can now see in OECD countries that: The link between the economic cycle and inflation has disappeared; The link between money supply growth and inflation has disappeared. This makes conventional monetary policy practice ineffective on two counts: declining unemployment no longer heralds inflation, and monetary policy no longer has an impact on inflation in the medium term.