Inflation in the Time of Corona and War

Servaas Storm
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Servaas Storm: Delft University of Technology.

No inetwp185, Working Papers Series from Institute for New Economic Thinking

Abstract: Reliance on established macroeconomic thinking is not of much use in trying to understand what to do in response to the constellation of forces driving up inflation in these times of COVID-19 and war. This paper attempts to reduce the heat and turn up the light in the debate on the return of high inflation and looming stagflation - by providing evidence-based answers to the main (policy) questions concerning the return of high inflation: is the increased inflation due to (global) supply and/or demand factors? Is the inflation in the US exceptional or are other OECD and emerging economies experiencing similar inflationary pressures? Is the increase in inflation permanent or transitory? Can the Fed safely bring down inflation? Is fiscal policy the underlying cause of inflation? Are there alternative, less socially costly, ways to bring inflation down? And what will happen to inflation in the longer run, when the US and other economies will face the impacts of global warming?

Keywords: Monetary policy; inflation targeting; fiscal policy; inflation; global supply chains; COVID-19 crisis; stagflation; spill-over effects to emerging economies. (search for similar items in EconPapers)
JEL-codes: E0 E5 E6 E62 O23 (search for similar items in EconPapers)
Pages: 113 pages
Date: 2022-05-30
New Economics Papers: this item is included in nep-cba and nep-mon
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp185

DOI: 10.36687/inetwp185

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