Inflation in the Time of Corona and War: The plight of the developing economies

Servaas Storm ()
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Servaas Storm: Delft University of Technology

No inetwp192, 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 and slowing down growth 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 key (policy) questions concerning the return of high inflation: How close are the parallels between the current conjuncture and the 1970s? What are the differences? Does what is currently happening already amount to stagflation? Can central bankers engineer a 'soft landing' of their economies or are we already poised for a deep (global) recession? What are the likely spill-over effects of monetary tightening in the US on the emerging economies? What, if anything, can we learn from the monetary and fiscal policy experiences and policy mistakes of the 1970s? And, finally, are there alternative, less socially costly, ways to bring inflation down?

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: 110 pages
Date: 2022-10-31
New Economics Papers: this item is included in nep-mon
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp192

DOI: 10.36687/inetwp192

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