New research by the International Monetary Fund (IMF) shows that sustained wage-price spirals are historically rare, and recent sharp interest rate hikes by central banks are likely to help prevent high inflation expectations from becoming entrenched.In an analytical chapter released on Wednesday from the IMF’s forthcoming World Economic Outlook, the Fund said wage and price hike dynamics in 2020 and 2021 were driven by “highly unusual” COVID-19 pandemic shocks, unlike past episodes that reacted to more conventional economic forces.IMF researchers studied 22 episodes of high inflation and falling real wages in advanced economies over the past 50 years and found most subsided quickly.
Load More
Load More