Global Economic Upswing: Priceless – or Costly?

The world economy has gained momentum. After years of crisis and sluggish growth in global production and trade, most economies now experience a marked increase in economic activity. At the same time, inflation is still subdued, raising the question whether the response of inflation to the acceleration of growth is exceptionally low? If so, is this a transitory phenomenon or evidence of a structural change in the growth-inflation relationship? Have we entered a goldilocks economy with price stability despite booming demand? Have central banks lost power to control inflation? Should we be aware of non-inflationary cyclical risks of overutilization that might backfire in the future? The 97th KKG discusses causes and consequences of persistently low inflation and the quest for appropriate monetary and fiscal policies.