Aren’t the cures for inflation worse than the disease?


Now, public leaders are all struggling to limit soaring prices. Which is not so simple. 198750023/Image’in – stock.adobe.com

GREAT DECRYPT – In France, economic activity and employment are still resisting. Won’t ECB rate hikes precipitate a trend reversal?

Like a devil out of its box, inflation is the cumbersome guest of this economic return. This summer, price increases reached 8.5% in the United States and 9.1% in the euro zone, including 5.8% for France. On both sides of the Atlantic, a slight wind of panic accompanies this resurgence of the past.

For forty years, the strong price increases had disappeared from the economic landscape and no leader in place has learned to navigate under these contrary winds. To tell the truth, the return of inflation was not so brutal: it was announced for two years. But central bankers, like most economists, believed in temporary increases and allowed expectations to settle to such high levels that they became self-fulfilling.

High inflation threatens a country’s social cohesion, but also its economic activity

Anne de Guigne

The time is no longer for regrets. From now on, the public leaders are all struggling to limit this soaring price. Which is not so simple, because according to the well-known formula of the former President of the Bundesbank…

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