“It is precisely this misconception – that higher inflation can be traded for additional economic growth – that caused stagflation in the US and Europe in the 1970s. For Americans and Europeans, it was a difficult time with high unemployment and rising crime, which was the case. As reflected in the figures and in popular culture, to suppress inflation, the US had to raise the rate to 20% in the early 1980s and go through two recessions in three years,” he said.
All world experience shows that it is easy to turn the wheel of inflation, but it is incomparably more difficult to curb it, which is why the Central Bank of the Russian Federation insists that it is impossible to buy sustainable economic growth at the price of high inflation, Zabotkin stressed.
Read the full interview with Bank of Russia Deputy Chairman Alexei Zabotkin on the website.
