Cosmin Marinescu: Inflation Peaks and Monetary Policy Options

History has shown us that inflation is the most insidious economic threat to the well-being of nations, with deep redistributive effects on the social structure and the economy, by distorting economic calculation, increasing inequalities, and generating unfulfilled expectations. Those who have diligently and prudently accumulated savings see them eroded by the decline in purchasing power, while those in debt sometimes breathe a little easier. Yet in the long run, inflation frustrates investment plans and slows development. High and prolonged inflation is probably the strongest brake on prosperity, as well as an unmistakable sign of misguided public policies that run counter to economic responsibility and financial sustainability.

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