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However, since the 1980s, inflation has been held low and stable in countries with strong independent [[central bank]]s. This has led to a moderation of the [[business cycle]] and a reduction in variation in most macroeconomic indicators - an event known as the [[Great Moderation]].<ref>{{cite news |url= http://www.timesonline.co.uk/tol/comment/columnists/article1294376.ece |title=Welcome to 'the Great Moderation' |first=Gerard |last=Baker |work=The Times |date=2007-01-19 |publisher=Times Newspapers |location=[[London, England|London]] |issn=0140-0460 |access-date=15 April 2011}}</ref>
After entering the 1970s, the [[floating]]{{snd}} exchange rate system was adopted by more and more countries, resulting in a correlation between inflation and exchange rate changes. The rise in the prices of most commodities and services over a period of time not only affects the domestic [[price level]], but also affects the exchange rate changes of national currencies in the global currency market. For example, in the 1990s, the yen's exchange rate has remained within a relatively stable range. <ref>Robert E. Hall [http://www.nber.org/books/hall82-1], “Inflation: Causes and Effects,” 1982. </ref> During this time, [[Japan]]'s domestic inflation rate has been maintained within a reasonable range. <ref>{{cite news |url=https://www.forbes.com/advisor/investing/what-is-inflation/ |title= What Is Inflation And How Does It Work? |date=July 14, 2020 |publisher=ForbesADVISOR |access-date=April 25, 2021}}</ref>On the contrary, the domestic inflation rate of [[Western European]] countries such as the [[United Kingdom]] was higher than the average level at the same time, which also led to huge exchange rate fluctuations.
==History==
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