It is undoubtedly that the continuation of macroeconomic rarities of the last time left a world very different than expected for the first part of the 20s. La Belle Époque In the era of the networks, with the West to the head, he enjoyed low inflation, low rates, fever for the ventures (some serious, some somewhat ridiculous), Netflix, Spotify, development of the metaverse and dream of aerospace exploration in the hands of the private.But everything seems to be a little odd and this world stands in parentheses, at least momentary, because there are other pressing urges. In the present day, inflation reappeared, an extinct dinosaur that has not been seen since the early 1980s. And with this, the rate rise and the end of excess liquidity which Papeó active everywhere, while developed economies reach debt levels only comparable to existing ones when World War II ended. Everything becomes worse if we add supply restrictions by triple C:
- Cpolitical (Ukraine and its impact on food and energy)
- CClimate rise (searchies that generate water shortages that make it difficult to produce microchips)
- COvid (China and its zero-Covid policy that increase restrictions within its territory).
As two cars at all speed going to a front shock, the inelastic supply of goods shocks with the demand that between 2020 and 2021 was Firenze by an expansive monetary and fiscal policy (and with Monday's diary, perhaps excessive).Markets are now attentive to the levels of debt of governments and the future flows of fiscal results. This is where, perhaps, a lot of Masnization of the world comes. Interest rates will be these or perhaps a little higher, but hardly lower. Enough to keep inflation online. If, for example, an inflation of 8% in dollars would not be desirable, but not less than 4%. And partly because, although a certain fiscal order of the economies is recommended (this can already be seen as the progressive finding of the deficit in the US of the last time), it will also not be so significant “the adjustment” and debt stocks will decrease, more than anything, with the licuation of liabilities. For this reason, governments, starting from this premise, hardly go for a real rate of interest “very positive”, because they understand that the way to finance liabilities must be, to a greater or lesser extent, with inflationary tax.Do you want to validate this article?
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pablo schiaffino
Hi! I am Pablo, Doctor in Economics and full-time teacher at Di Tella. Provide technical advice to the Central Bank of the Argentine Republic, the Ministry of Production and the Province of Mendoza (project funded through the IDB). Between 2018 and 2020, I was an adviser to the Chamber of Deputies of the Argentine Nation.
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