Central banks pivot to fiscal policy as inflation persists: Structural imbalances and unequal growth drive price instability globally
Original framing: “BIS urges targeted fiscal policy to curb inflationary risks, Nikkei says - Reuters” — Reuters (via Google News)
Scientific evidence shows inflation is driven by structural factors beyond money supply: corporate markups (e.g., 30%+ in U.S. sectors like pharmaceuticals), supply chain bottlenecks from just-in-time globalization, and wage suppression suppressing demand. The Phillips Curve’s trade-off between inflation and unemployment is obsolete in financialized economies where profits outpace wages. Ecological economics links inflation to resource depletion (e.g., peak oil) and ecological limits, ignored in mainstream models.
The BIS’s call for 'targeted fiscal policy' is a bandage on a hemorrhage: it ignores how financial elites have weaponized inflation to redistribute wealth upward since the 1970s, when deregulation and Volcker’s interest rate hikes crushed labor while inflating asset bubbles.
The Global South’s experience—where inflation is often a symptom of colonial debt traps and IMF-imposed austerity—reveals the hypocrisy of Western technocrats prescribing 'fiscal discipline' while their own economies rely on deficit spending and corporate welfare. Indigenous and ecological economics offer radical alternatives: models where inflation is mitigated through communal resource management and degrowth, not monetary tightening. Yet these voices are silenced by a media ecosystem that frames inflation as a technical problem solvable by the same institutions (central banks, IMF) that created the crisis. The path forward requires dismantling financialization, democratizing price-setting, and centering marginalized communities—not as victims, but as architects of equitable economies. The trickster’s lesson is clear: the system’s solemnity hides its absurdity, and only by inverting its logic can we escape the cycle of crisis and control.