You don't want these people even raising this question. It's like hearing your surgeon say "whoops" just as you're going under: "Whaaa? zzzz"
From the Bank for International Settlements, May 4L
Key takeaways
- Inflation has returned, reaching levels not seen in decades. Whether inflation enters a persistently higher regime will depend on labour market developments, and on whether a wage-price spiral emerges.
- To date, evidence for a broad acceleration in wage growth is mixed. Wage growth has picked up significantly in the United States, but remains moderate in most other advanced economies, despite tentative signs of a renewed sensitivity of wages to inflation in some segments of the labour market and a pickup in inflation expectations.
- But extrapolating behaviour from low-inflation periods is problematic. If inflation remains high, households may ask for higher wages to make up for lost purchasing power and firms may raise prices to protect profit margins. And stubbornly high inflation may lead to institutional changes such as automatic indexation and cost-of-living adjustment clauses....
....MUCH MORE (link to 8 page PDF)
HT: FT Alphaville's Further Reading post.
