"Inflation in some economies is rising at the fastest pace in four decades, while tight labor markets have boosted pay gains. That has raised concerns that these conditions could become self-reinforcing and lead to a wage-price spiral—a prolonged loop in which inflation leads to higher wage growth, fueling even higher inflation.
An examination of recent wage dynamics and the prospect of such a wage-price spiral are the subjects of an analytical chapter of our latest World Economic Outlook, which finds that, on average, the risks of a spiral are limited—so far. Three factors are working together to contain the risks: the underlying shocks to inflation are coming from outside the labor market, falling real wages are helping to reduce price pressures, and central banks are aggressively tightening monetary policy." Read more here on the IMF blog.
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Maree SpraggonTeacher of IB Economics at the American School of Budapest Archives
February 2024
Categories
All
|