In the United States and Western Europe, inflation is at multi-decade highs and central bankers are rightfully afraid that high inflation might lead to high wage inflation and stat a wage-price inflation spiral similar to the 1970s. But the link between inflation and wages today is much weaker than it was fifty years ago and examining the reasons why gives us an understanding of what needs to happen to start a new spiral.
When I'm looking at producer prices, I'm seeing double-digit numbers for most developed countries by just glancing at tradingeconomics.com. I agree that it could even be a lot worse if China saw some inflation, but it's impossible for productivity growth to catch up with that rise in PPIs anytime soon.
Thanks for your article!
When I'm looking at producer prices, I'm seeing double-digit numbers for most developed countries by just glancing at tradingeconomics.com. I agree that it could even be a lot worse if China saw some inflation, but it's impossible for productivity growth to catch up with that rise in PPIs anytime soon.
https://tradingeconomics.com/country-list/producer-prices-change?continent=europe