Stagflation: be alert, not alarmed - EP143

The World Bank has downgraded its global economic growth forecast and has warned of the rising risk of stagflation. What is stagflation and how likely is it? And a related question: what is a wage-price spiral and how likely is it? Show host Gene Tunny and his colleague Arturo Espinoza discuss how the current global situation is similar and dissimilar to the 1970s, with a consideration of recent perspectives from the World Bank and BIS.  Links relevant to the conversationIs a US recession imminent? w/ Michael Knox, Chief Economist, Morgans Financial – EP142 – Economics Explored (Previous episode with Michael Knox)Jobs report May 2022: Payrolls rose 390,000 in May, better than expected as companies keep hiringhttps://trends.google.com/trends/explore?q=stagflation&geo=US (Google Trends for stagflation)The Fed must act now to ward off the threat of stagflation | Financial TimesAre major advanced economies on the verge of a wage-price spiral? (BIS Bulletin 53)Commodity market disruptions, growth and inflation (BIS Bulletin 54)Robert Heller’s paper on International Reserves and Global Inflation (from p. 28)Stagflation Risk Rises Amid Sharp Slowdown in Growth (World Bank report) Stagflation danger prompts  World Bank to cut growth outlook (Washington Post article)EP59 on the Natural Rate of Unemployment (re. Milton Friedman’s AEA presidential address)Friedman's presidential addressNB Australia’s wage price index increased 2.4% through the year to March 2022 (see Wage Price Index, Australia, March 2022 | Australian Bureau of Statistics) Chart of the Week - The real price of crude oil - Callum ThomasThanks to the show’s audio engineer Josh Crotts for his assistance in producing the episode. Please consider signing up to receive our email updates and to access our e-book Top Ten Insights from Economics at www.economicsexplored.com. Also, please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.