Stagflation is a growing threat to the global economy
The problem is not just the rush of cheap money, it is the structural bottlenecks in global supply that are emerging in ageing populations and deglobalisation.
There is a growing debate about whether the inflation that will arise over the next few months will be temporary, reflecting the sharp bounceback from the COVID-19 recession, or persistent, reflecting both demand-pull and cost-push factors.
Several arguments point to a persistent secular increase in inflation, which has remained below most central banks’ annual 2 per cent target for more than a decade.
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Project Syndicate
Nouriel Roubini is Professor Emeritus of Economics at New York University’s Stern School of Business and Chief Economist at Atlas Capital Team.
