Is inflation going to rise once the lockdowns from the pandemic have been relaxed? Mainstream economics has no idea. For a start, the rate of inflation in the prices of goods and services in the major capitalist economies has been falling as a trend since the 1980s. And this is despite the attempts of central banks to boost the money supply in order to stimulate demand and reach a certain inflation target.
Indeed, just before the COVID pandemic broke, inflation rates were falling well short of the target rate (usually around 2% a year) aimed at by central banks. Monetary policy was not working in terms of sustaining a moderate rate of inflation; instead money/credit was flowing into financial assets and property, driving up prices in those assets to new record highs.
But why do we care what the rate of inflation is? Well, workers and their families do not…
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