The cost of disinflation

The global economy is currently facing one of its most challenging moments in decades. This is the main message given by central bank leaders gathered at their annual meeting in Jackson Hole, Wyoming, at the end of August.

In short, despite the recent decrease in the prices of goods, the vast majority of prices remain on the rise and inflation will not return to the targets without a firmer monetary policy tightening. In many countries, this process is still in its infancy and far from a comfortable level in terms of future price dynamics. It is getting increasingly difficult to believe that this can be done without much impact on economies. Most likely, unfortunately, the cost of global disinflation will be high.

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