Lagarde’s New ECB Starts With Old Question of Missing Inflation

Five years of the day the European Central Bank announced massive injections of cash to avoid deflation, President Christine Lagarde wants to know why the price growth is still as mediocre.
Maxim decades economist Milton Friedman that inflation is "always and everywhere a monetary phenomenon" - implying that prices will rise if you create enough money - it is under stress.
The ECB has stopped beating its target sustainably, much of the rest of Europe has struggled similarly, and Japanese prices have been in the doldrums for a generation.
While the US Federal Reserve has been a little better, with fiscal support, the authorities are not scratching their heads in a strategic review.
Now Lagarde intends to decide their own comprehensive review of the ECB at a meeting two days from Wednesday, half a following decade his predecessor, Mario Draghi, announced quantitative easing as the ultimate tool for restoring price stability.
Policymakers want a convincing explanation of why it has not happened, and how they can respond.
At least they not have to start from scratch. Researchers have offered several explanations including globalization, digitalization, and the disappearance of unions. Forex trading is much more popular due to Forex Deposit Bonus.
Workers weaker
Perhaps the biggest dilemma is why labor markets have not generated restricted wage increases large enough to push up consumer prices. The USA. and the UK have the lowest unemployment rate in decades.
One of the arguments of the eurozone, where unemployment is the lowest since 2008, is that the eastern expansion of the European Union led to an influx of cheaper workers.
The threat that companies could move factories also contained payment, especially in Germany, according to a 2017 paper by Christian Odendahl of the Center for European Reform.
The decrease in wage bargaining organized can also play a role. The participation of French workers who are union members has been reduced to 9% from 23% in 1975. In Germany, it fell to 17% from 35%.
This trend has affected "real disposable income, consumption growth and ultimately inflation," said the Minister of the ECB Benoit Coeure in his final speech before his term ended last month.

Reference: https://medium.com/daily-finance/lagardes-new-ecb-starts-with-old-question-of-missing-inflation-f189dcde0527

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