The global economy continues to struggle to recover from the impact of the health crisis and threats from variables such as delta continue to cause uncertainty. among advanced economies United State It is the main focus of attention and discussions are taking place not only on the fringes of recovery but also on What will happen to the prices.
The The latest inflation data It was lower than expected but the annual increase is still above 5 percent. In a world where interest rates are close to zero, this number inevitably puts pressure on investment decisions. How do you manage liquidity if you want to maintain the true value of the assets?
The leading economists of the American elite do not have a single reading of what will happen to the inflation process in the next few years. Paul Krugman He is one of the academics who has so far maintained a moderate position, criticizing analysts who predict a return to stagflation of the 1970s.
But in one of his last columns in The New York Times -Without giving up this position- It seems that doubts about the future of inflation rates have begun. Although he states that for now he is still on the side of those who consider the pressures to be temporary, the analysis he does is left floating to the point that it may not be.
Krugman considers it necessary to find out whether the new Inflation began to “take hold” in the economic system, as it did in the 1970s Thus, it can become a permanent problem. Or if it is just an effect of the US economy’s exit from the epidemic and the associated bottlenecks that generate a shortage of inputs and labor and raise costs in some activities.
He suggests that one way to analyze the situation could be through the assessments of the White House Council of Financial Advisers. This indicator uses core (core) inflation and subtracts The impact of prices on sectors affected by the epidemic. He maintains that although in recent months he has advocated the use of this indicator, he now considers it not the best option because related cost increases may be ignored.
The Nobel Prize believes that if the epidemic is effectively controlled, inflation will tend to fall and will end up showing that A problem similar to episode 1951, when prices rose to 9 percent, from what they were in the late 1970s. However, he acknowledges that this is his vision so far but may change.
For economists who have a direct impact on markets (and the perspective of investors), The outlook for the US economy is less optimistic. Krugman is not the only respected academic who directs his speech and internalizes his views on what can happen to prices. Harvard researcher Kenneth Rogoff wondered if there was a return to the 1970s.
It seems that this issue is one of the important points on the agenda of the American debate and in that debate Nouriel Roubini Stay ahead of the pessimists. Take advantage of every public appearance to warn of the future of stagflation. And it adds another effect: the potential for a wave of corporate and sovereign defaults.
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