Philippe Aghion: “The tariff shield cannot be maintained indefinitely”
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INTERVIEW – The professor of economics at Insead details the three levers for controlling inflation: monetary, fiscal and industrial policies.
LE FIGARO – How perilous is the situation on the inflation front and how to get out of it?
PHILIPPE AGHION- The problem is that we came out of the Covid period with excess demand because “whatever the cost”, while the offer does not follow because of the break in the production chains. This inevitably led to inflation, reinforced by the increase in energy prices, itself aggravated by the war in Ukraine. There are three essential levers for controlling inflation. First of all, monetary policy: central banks slightly increase interest rates to coordinate the expectations of economic agents. Then the budgetary policy: the tariff shield and the increase in the Macron bonus to avoid price-wage spirals. Finally, the industrial policy to boost supply in the longer term.
Read alsoPhilippe Aghion: “It is essential to reform the State and our pension system”
Was the State right to bear a significant part of the price increase, via tariff shields…
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