CONVENTIONAL ECONOMIC WISDOM insists that the only effective cure for rising inflationary expectations is a short, sharp recession. The ghost of John Maynard Keynes is forever whispering in the ears of Labour parties – even those which long ago embraced the precepts of Neoliberalism – and his message is always the same: Spend, spend, spend. Once stimulated, inflationary expectations, and the upward spiral in wages and prices they set in motion, are very difficult to supress. Continue to spend, spend, spend? Who knows, by the time the next election rolls around in 2026 they might even be in the mood to: Spend, spend, spend.

Source: Stuff June 10, 2022 20:26 UTC