DON’T EXPECT ANY EASY SOLUTIONS TO EMERGE THIS WEEK.

That’s not the way it’s supposed to work. In the U.S., the unemployment rate is at a 16-year low of 4.3 per cent. In the eurozone, unemployment is at 9.1 per cent — which might sound hefty to North Americans, but is actually the lowest mark in more than eight years.

What should happen is that tightening labour markets lead to rising inflation. But they’re not.

Eurozone inflation in July was unchanged at 1.3 per cent; in the U.S., the personal consumption expenditure index, the Fed’s preferred inflation measure, sits at a paltry 1.5 per cent, down from 1.7 per cent in April.

Hypotheses explaining inflation’s no-show are plentiful, but they boil down to these: either two-per-cent inflation is gone and it ain’t coming back (thanks to structural factors such as aging populations, technological advances and so on), or it’s bound to turn up sometime — we just have to wait.

Almost uniformly, central bankers are hoping for the latter. The problem with waiting, however, is that rates are still low, and bubbles in asset prices — stocks, bonds, real estate — have popped up all over the place.

The Fed seems to believe that tightening monetary policy gradually, almost so gradually that no one will notice, will constrain the bubbles just enough to keep them from bursting. But while markets don’t notice, they just keep on bubbling.

On the other hand, monetary tightening will do nothing to revive inflation towards the magical two per cent, and threatens to take the legs out from under GDP growth.

The theme of this year’s Jackson Hole gabfest is Fostering a Dynamic Global Economy. That is a tall order, given that it’s something central bankers have failed to do since the Great Recession.

In short, don’t expect any easy solutions to emerge this week from Jackson Hole. There aren’t any.