Corona brings back a specter from the 70s

stagflation

Energy, raw materials and food – prices are rising in many areas.

(Photo: Smetek)

  • The corona pandemic brings a horror scenario from the 1970s back into the economic and monetary policy debate. What are the signs of a comeback of stagflation?
  • Despite partial lockdowns and delivery bottlenecks, employment is high. In addition, the number of workers is falling rapidly. Does that set a wage-price spiral in motion?
  • When prices are particularly volatile, investors keep making the same mistakes. How can this be avoided?

It seems to be the return of the same thing over and over again: again these Prime Minister’s Conferences in the Chancellery, again the hectic activity behind the wave, as if virologists had not warned since June that this would happen. And again the map of the republic is slowly but steadily turning deep red to purple.

The only new thing is that Germany is in an interregnum between a managing government that is just tired of office and a coming government that is slow to take on responsibility.

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Further

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