Inflation forever

Beyond the effects of the dramatic rise in inflation in the final months of 2021 on monetary policies and markets, the consequences on the real economy must not be overlooked. We are obviously thinking of consumers’ loss of purchasing power. But the main causes of inflation – rising energy prices (oil, gas, electricity) and bottlenecks on some intermediate goods – have at least two other notable consequences. A trade balance that is deteriorating due to the increase in energy bills but also lower exports due to constrained production.