Those who previously disliked the economic benefits of globalization characterized by efficient supply chains now have the opportunity to correct their misjudgment in these weeks.
The German economy, which is closely interwoven with the world, is feeling the consequences of a lack of material.
And even the Chinese economy, which is certainly impressive, but also repeatedly overestimated in the West, sends disturbing signals with temporary power cuts.
So far, economic forecasts have been based on the assumption that these difficulties will be overcome quickly, but slowly companies and some economists are beginning to wonder whether the world economy will not run out of balance for a long time.
An expression that became known half a century ago and which does not bring back any pleasant memories is circulating more and more frequently: stagflation.
Significantly rising labor costs definitely send the wrong signal
Stagflation marks the meeting of economic stagnation and inflation. In the past few decades, stagflation was not uncommon in emerging and developing countries, but the industrialized nations rarely came under the grip of this plague. Because usually high inflation shows up there as a temporary side effect of a boom. Even now people praying for health are on the way, assuring them that the economy will pick up again in the coming year, but that the currently quite high inflation rate will fall again.
This assumption assumes that people view the current surge in inflation as temporary and not push for significant wage increases.
It's not that safe.
If the state wants to set an example with a noticeable increase in the minimum wage, the unions should not hesitate long with proud demands for collectively agreed wages.
Significantly rising labor costs are definitely the wrong signal in an economic stagnation.
Stagflation is an uncomfortable situation in which it is easy to make policy mistakes.
The next federal government could quickly face unexpected challenges.