INET’s Executive Director Rob Johnson was recently interviewed by a reporter for CNBC India, who asked him about the risk of endemic inflation - specifically, whether fears of an inflationary spiral are justified.
“With the amount of slack we have in the US economy,” Johnson responded, “there is essentially no danger whatsoever of an endemic inflation buildup.”
In fact, Johnson said that he was actually relieved that prices were rising, both in the US and in Europe, because he belived that the rising prices alleviated risk of a deflationary spiral. On the other hand, what concerned Johnson was the potential of rising food prices, and how this could exacerbate social inequalities, especially in developing countries like China, Brazil, and India:
“A rise in food prices themselves,” Johnson said, “take people who are at the lower end of the wealth or income spectrum, and put them under pressure.”
You can watch the whole interview here:
INET is concerned with the idea of social inequality, and especially how it will play out in developing nations. In the following video, Anwar Shaikh, professor at the New School for Social Research, echoes Johnson’s views that the big economic challenge of our era is not the environment or inflation, but the poverty of the huge number of people who live at the bottom of our social ladders:
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