Will COVID-19 be Followed by Inflation? An Inter-Generational Transfer Perspective

Lubos Pastor

Governments around the world are spending mightily to deal with the fallout of the COVID-19 crisis. When the dust settles, the burden of public debt will be much heavier than it is today. Some countries’ debt-to-GDP ratios are likely to grow by more than 20%. How will policymakers deal with this mountain of debt? They may be tempted to inflate it away.

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