MADRID, 5 Oct. (EUROPA PRESS) –
The high inflation rates in many countries at the same time and the fact that the labor markets continue to offer signs of solidity fuel the fear of an upward spiral in wages that will lead to an inflationary loop, something that the International Monetary Fund (IMF) considers unlikely, taking into account to the analysis of similar historical episodes.
In this regard, the international organization maintains that there are three factors that are working together to contain the risks, including that the underlying shocks to inflation come from outside the labor market, that the fall in real wages is helping to reduce pressures on prices and that central banks are aggressively tightening monetary policy.
In this way, he considers that the restrictive measures recently undertaken by many central banks “are encouraging” and trusts that they will help prevent high inflation from taking hold and deviating from the objective for too long.
With inflationary shocks originating outside the labor market, falling real wages helping to curb inflation, and monetary policy tightening more aggressively, the chances of persistent price-wage spirals appear limited. “, he concludes.
In this sense, he points out that the analysis of historical episodes with characteristics similar to the current one suggests that these “did not tend to be followed by a spiral of wages and prices.”
In fact, the international institution recalls that inflation tended to fall gradually on average and nominal wages gradually recovered over several quarters.
