Inflation phobia, myths and dogma exacerbate policy responses

Abstract

This article offers an alternative narrative on contemporary inflation and policy responses to it. It argues policy responses to inflation have been driven by unfounded beliefs under-lying current inflation myths and phobia. These are rooted in neoliberal ideology and dogma, especially influential since the neo-classical counter-revolution against Keynesian macroeconomics. They prevent better understanding of the nature and causes of inflation, leading to inappropriate policy responses exacerbating the situation. Misdiagnoses, policy confusion and anti-labour bias are exposed before offering an alternative narrative and concluding remarks.