WASHINGTON, USA – Inflation is high virtually everywhere, but what’s pushing prices to record levels in Europe is not necessarily what’s fueling inflation in the United States.
The European Central Bank and the Federal Reserve share a common problem and similar financial tools to fight it, but Europe’s supply-dominated inflation and America’s mostly demand-dominated inflation require slightly different approaches.
Philip Lane is chief economist for the European Central Bank. In this podcast, he says finding the “sweet spot” between fiscal and monetary policies will allow for continued support to vulnerable Europeans hard hit by high energy prices and double-digit inflation, while not further straining public finances.
Philip Lane participated in the IMF Jacques Polak Annual Research Conference.
Watch the Webcast at IMF.org