What accounts for the extraordinary performance of the U.S. economy in recent years? How is it that we have been able to enjoy such strong economic growth and resulting low unemployment rates without an upturn in inflation? The author reviews the primary explanations offered for these unusually favorable circumstances that the U.S. economy has been the beneficiary of temporary factors that have held down the inflation rate or that the U.S. economy has entered a new era of intensified competition and rising productivity growth in which inflation is less of a threat. She also discusses arguments that the U.S. economy may be experiencing an asset price bubble, noting that while rising stock prices cannot explain low inflation, decreases in inflation may have contributed to rising stock prices.