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Jürgen Matthes / Thomas Obst / Berthold Busch / Markus Demary / Michael Grömling / Björn Kauder / Gero Kunath in European View Externe Veröffentlichung 19. April 2023 Up, Up and Away? A Price Stability Guide for Policymakers

Inflation is back with surprising force. Should inflation remain significantly elevated over an extended period, detrimental effects on the EU’s economic model, on growth and on social peace can be expected.

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Externe Veröffentlichung
Up, Up and Away? A Price Stability Guide for Policymakers
Jürgen Matthes / Thomas Obst / Berthold Busch / Markus Demary / Michael Grömling / Björn Kauder / Gero Kunath in European View Externe Veröffentlichung 19. April 2023

Up, Up and Away? A Price Stability Guide for Policymakers

to Download

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

Inflation is back with surprising force. Should inflation remain significantly elevated over an extended period, detrimental effects on the EU’s economic model, on growth and on social peace can be expected.

A coordinated macroeconomic response is required, combining monetary and fiscal policy. The European Central Bank needs to continue to signal its willingness to stick to its price stability mandate to keep inflation expectations under control. It should not succumb to the goal of fiscal dominance by targeting public debt sustainability more than price stability. This would imply giving up its independence. Fiscal policy should facilitate the objective of monetary policy to target inflation while minimising the impact on economic growth. To reduce the danger of a wage–price spiral, fiscal policy should strive to limit the impact of extreme price rises and should be targeted towards those members of society most affected by the higher prices. In contrast, general expenditure increases or tax reductions for an extended period of time carry the danger of overburdening governments. Price interventions should be the very last option, as they decrease the incentive to reduce the demand for higher priced goods and thus do not allow for the signalling power of prices regarding scarcity. Due to high inflation rates and supply-side constraints, it is currently not the right time for a fiscal demand stimulus.

to Download
Externe Veröffentlichung
Up, Up and Away? A Price Stability Guide for Policymakers
Jürgen Matthes / Thomas Obst / Berthold Busch / Markus Demary / Michael Grömling / Björn Kauder / Gero Kunath in European View Externe Veröffentlichung 19. April 2023

Up, Up and Away? A Price Stability Guide for Policymakers

to Download

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

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Matthias Diermeier / Christian Oberst / Samina Sultan in Aus Politik und Zeitgeschichte Externe Veröffentlichung 25. März 2024

Europa der Regionen?: Wahlbeteiligung und Euroskepsis bei den Europawahlen

Vom 6. bis 9. Juni 2024 findet die zehnte Direktwahl zum Europäischen Parlament statt. Zwar wird die Europawahl voraussichtlich auch in diesem Jahr stark von der nationalen politischen Kultur, den länderspezifischen Diskursen sowie den wirtschaftlichen ...

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Jürgen Matthes in der taz Interview 18. März 2024

Folgen einer zweiten Amtszeit Trumps: „Der Schaden wäre dramatischer”

Donald Trump könnte zum zweiten Mal US-Präsident werden. Das hätte große Folgen für die deutsche und globale Wirtschaft, warnt IW-Ökonom Jürgen Matthes im Interview mit der taz.

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