Volker Wieland: Inflation could exceed central banks' inflation target (FAZ)

Prof. Volker Wieland has warned of a rise in inflation rates that could exceed the central banks' inflation target. In an interview with "Frankfurter Allgemeine Zeitung" he said: "The risk that inflation will also be higher in the next few years and exceed the central bank's target has increased".

Inflation has already risen as a result of the renewed increase in value-added tax and the introduction of a CO2 price for mobility and buildings. The purchase of government bonds by central banks is also having an effect. "This puts more money into the system. This can accelerate inflation, especially if the purchases are made permanent and the bond holdings are not subsequently reduced."

Unlike the financial crisis, he said, the money supply is currently higher. "It's different now because of the high lending," he said. That could return to normal, he said. But "if the economy does not grow for several years, but the money supply increases by ten percent annually, price increases would be unavoidable," Wieland warned. 

FAZ: "Es ist anders als nach der Finanzkrise" (€)