Matolcsy: Dragonflies are common, not dragons

English2021. ápr. 21.GOVERNOR MATOLCSY100WORDS

It is perfectly right to say that the longer-term outlook for inflation remains to be clouded by the same secular, powerful forces that have kept it contained for decades. /Robin Wigglesworth, FT, 27 March 2021/

Post-lockdown spending and base effects might increase inflation for a couple of quarters. However, inflation dynamics will not change, because they really do not change on a dime /Jay Powell/.

Even wage growth, which used to be the real leading indicator of broad-based inflation, ended its career in a softening Phillips curve.

In a post- and pre-pandemic world, inflation will be subdued exactly because the present pandemic has accelerated digital transition. New waves of the information revolution will result in decreasing prices across the board in the world economy.

Dragonflies are much more common than dragons and fortunately, they are much less fierce.

Governor Matolcsy, MNB, the Central Bank of Hungary

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