For lasting structural reasons, it will be necessary to consider raising central banks’ inflation targets

Inflation in OECD countries is expected to be structurally higher in the future for several reasons: Population ageing; Reshoring from emerging countries, rising production costs in these countries and geopolitical tensions; The energy transition (higher cost of renewable energy, strong demand for commodities, etc.) and the costs of climate disruption; Greater bargaining power for wage earners and unions. If inflation is structurally higher, it will be necessary to consider raising central banks’ inflation targets to prevent them from having to conduct a perpetually restrictive monetary policy.