Resist Inflation Phobia Coup

By Anis Chowdhury and Jomo Kwame SundaramSYDNEY and KUALA LUMPUR, Feb 8 2022 (IPS) Calls, even screams, to fight inflation above all else are getting shriller. Thankfully, even The Economist (5 Feb. 2022) reminds all, Fighting inflation could put the world in a slump. No inflation consensus International Monetary Fund (IMF) Managing Director Kristalina Georgieva doubts the world faces a runaway inflation threat. She urges policymakers to carefully calibrate fiscal and monetary policies, with more “specificity”, as not ‘one size fits all’. Anis ChowdhuryWidespread reversal of COVID-19 spending and low interest rates threaten recovery. Similarly, Bank of England chief economist Huw Pill stressed the central bank was not going all out to tighten monetary policy. Instead, like Georgieva, he advocates a more nuanced approach, reasoning, “As the pandemic recedes and the level and composition of global demand and supply normalise, these inflationary pressures should subside”. US inflation phobia Inflation hawk Larry Summers – Clinton’s last Treasury Secretary and Director of the National Economic Council during Obama’s first two years – claims it is “wishful thinking” that current inflationary pressures will subside. He insists, “The painful lesson of the 1960s, 1970s and the 1982 recession is that excessive demand stimulus leads not just to inflation, but to stagflation and ultimately recession, as inflation must eventually be brought under control”...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: COVID-19 Development & Aid Economy & Trade Financial Crisis Global Headlines Labour TerraViva United Nations IPS UN Bureau Source Type: news