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Anastasia Podrugina, Kirill Lysenko

The Return of the World Economy to a High Inflation Regime

2023. Vol. 18. No. 3. P. 7–31 [issue contents]

Global inflation is one of the most significant challenges for the post-pandemic world economy. After several decadesof low inflation and even elements of deflationary processes in developed countries, the danger of falling into anew period of great inflation had seemed insignificant. Dovish monetary policy during the 2009–19 period did notprovoke a spike in inflation, and the slowdown of the economy during the lockdown period put the vigilance to rest.However, the COVID-19 pandemic and anti-crisis measures it triggered, the Russia-Ukraine conflict, and sanctionsand anti-sanctions solidified inflationary processes around the world, both in developed and developing countries.In this article, we show the inertial nature of inflation in both the U.S. and the European Union (EU) and arguethat there has been a transition to a high inflation regime, despite the decline in developed country inflation in thefirst quarter of 2023 mentioned in the International Monetary Fund’s (IMF) January report. Getting out of this highinflation regime will require much more serious and time-consuming measures than those used to manage inflationin the low inflation regime.

Acknowledgments: this work is an output of a research project “Assessment of the consequences of anti-Russiansanctions for the global economy,” implemented as part of the HSE University Project Group Competition atthe Faculty of World Economy and International Affairs.

This article was submitted 07.03.2023

Citation: Podrugina A., Lysenko K. (2023) The return of the world economy to a high inflation regime. International Organisations Research Journal, vol. 18, no 3, pp. 7-31 (in English)

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