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The current inflation isn't caused by wages, it's caused by energy prices.
by fleddr 4y ago
The current inflation isn't caused by wages, it's caused by energy prices.
- fauigerzigerk 4y agoExactly, energy and the aftermath of covid. But central banks can't do much about that. What they're trying to do is stop the next round of inflation that would be caused by wage rises if everyone is fully compensated for the current round of inflation expecting the round after that to follow suit. If these expectations become entrenched the cycle is very hard to break. Only a severe recession with high unemployment will work at that point and nobody wants that.