Could inflation spiral out of control if monetary policies do not combat it?
The most likely scenario today is one where: Inflation stabilises at a higher level than in the past in the euro zone and, even more so, in the United States; The central banks react only “softly” to this inflation (due to the high levels of debt ratios and asset prices), which means that monetary policies remain expansionary and do not combat it. So if monetary policies do not combat inflation, is there a risk that it will spiral out of control and become very high? The answer is no if: Commodity prices (in the broad sense) stabilise or fall; The degree of wage-price indexation remains low; There is no significant change to the rules or organisation of the labour market.