 There's not much that can be done, in my view, other than try to solve the problem that inflation caused. And what's the problem in inflation causes? That mostly workers lose with inflation. So the real wage goes down. So the best policy is actually to, in my view, to try to compensate workers for the effects of inflation. Mattias Vernango, professor of economics at Pugnauld University. The COVID era did bring up a level of inflation that it's unprecedented. 40, years that we haven't had that kind of inflation. It is, by the standards of the 1970s, it's still relatively low. So it's seven, eight percent in the United States and other advanced economies. So one digit, not two digits. And even in the periphery where in the 70s we had three digit very high inflation, this time around it's two digit very high inflation. So I think Argentina and Turkey are probably of the middle income countries, the ones with higher inflation. And it's about 80, 90, approaching 100, approaching the three digit. The conventional explanation back in the 70s of inflation was that, you know, the traditional division was the man pool versus cost push. And the man pool was that there is excess demand. So I think that the conventional Friedman sort of story, if you want to give that this sort of more conventional orthodox view of inflation, was that it was caused by excesses of the Fed, printed too much money, particularly in that time Arthur Burns, associated perhaps the lack of independence of the central bank and the fact that Nixon had influence over Burns. I think that story is slightly unfair, but you know, that is the traditional story behind that. So the printing of much money perhaps was associated to the excesses of fiscal spending of the government. Very often in more conservative circles associated to the ideas that the 1960s, the expansion of the welfare system in the U.S. had provoked that. During the more recent bout of inflation during COVID, there is an interpretation that it's very similar to that of the 1960s and 70s, I should say. So the idea that it's the man pool, that because of the pandemic and the crisis that it generated, governments acted promptly, fiscal policy to make hold workers and provide salaries for those that are not working and some sort of compensation. And then of course the Fed, you know, with a huge increase in its balance sheet and helping financial institutions and so on and so forth. So again, an increase in money supply and the notion was it's excessive. People are consuming too much. They have too much access to money and credit and so on and so forth. And of course then the conventional solution, which I should say it's mostly Keynesian progressives in the Democratic Party within the United States. Larry Summers is the name that comes to mind. In my view, it's the key proponent of more contractive monetary policy. And that the notion that the fiscal deficits were too large, that you know, the so-called output gap was very large and hence there was a need for less fiscal expansion and for monetary contraction. On the left, the notion was, I think somewhat the traditional story would have been in the 70s, not just on the left that it was cost push, it was the oil shock, but also that it was distributive conflict. So once you had the oil shocks that increased the cost of production, workers, unions that were very strong pushed for higher wages and that led to wage price spirals. So it's conflict inflation. And I think that that's probably the best explanation of inflation in the 70s. By the COVID era, I think that there is a resurgence of a view on the left or heterodox groups in economics to suggest that it's corporations, that corporations increased prices and that that's what's behind the crisis. And then hence what's needed is some sort of control of corporations, price controls, you know, regulation and so on and so forth. With respect to that, there are two things that I think are important to understand. First of all, I do agree with the notion that corporations do have a lot of power. A good chunk of what happened in the last crisis was that the price of oil went up. By the way, it came down considerably now, the price of natural gas went up, particularly because of the conflict in the Ukraine. And that generated, you know, I mean, that's an international price. It said, you know, commodity prices set in international markets. If Exxon is producing oil in the Gulf of Mexico and the price of oil internationally goes up and their costs are the same, the profit margins go up, no doubt. But it's not the cause of inflation. It's the result of inflation. And while I do believe that price controls are an important tool, where you have those tools more or less in place, like the U.S. during the Second World War, because the state was, you know, managing the war machine and in countries in which you have a national oil company, you can sort of control prices, subsidize it and, you know, bring it down, it's harder in the U.S. So short term, I think that that's not a particularly good solution. So the funny thing that I would say, you know, everybody, when I say this is there's not much that can be done in my view other than try to solve the problem that inflation caused. And what's the problem in inflation causes? That mostly workers lose with inflation. So the real wage goes down. So the best policy is actually to, in my view, to try to compensate workers for the effects of inflation. I also think that this inflation will not persist. I still think that this is something that is not persistent exactly because I think that the working class is not strong enough and wages are not going to go up. And hence you just compensate workers. How do we explain the variations of inflation, you know, from the great inflation of the 70s to the great moderation and this current bottom inflation is an interesting question if you are going to have a sort of a coherent explanation. First of all, even if you go further back and think of the golden age of capitalism, the period from the 40s to the 60s. There is some inflation, but inflation is subdued. It's not very high. It's higher perhaps than it was in the great moderation period, say the 80s to until recently. What allowed the relative stability, so what I said subdued, is the fact that you had wages increasing with productivity. So while prices, you know, there could be some sort of pressure because wages were going up, most of that was adjusted because they were growing with productivity. So there was no necessary significant increase. There was some increase, as I said, bigger but not large. From the 70s is the period of crisis which the sort of social pact that allowed the golden age of capitalism to occur falls apart. It falls apart for many reasons. You know, probably not, we wouldn't have time to discuss them, but it has to do with all of the social sort of effects it has to do with civil rights and all of those things. So when you come to the other side, and the period of the great moderation, I think that then the anchor of stability, of prices being more or less stable, it's not so much that wages grow with productivity, because that doesn't happen anymore. There is a famous graph that shows productivity shooting up from the 80s onwards and real wages basically stagnated. It's exactly that wages stagnated. So it's the nation of wages that has led to the great moderation and globalization, I should say. The fact that there is competition and eventually Japanese, Chinese products, mostly from East Asia, South Korea are coming into developed countries. I don't think it is the wise management of monetary policy by the central banks and the independent central banks that did the trick. For those of us that think that the 70s was cost-push and distributive conflict, obviously the stabilization didn't happen because of independent central banks, but it was the international circumstances of globalization and the weakness of the labor class. I think that what happened is a rearrangement of the supply chains that was started even before the pandemic because of the geopolitical issues between the US and China. Those were intensified, particularly because of the zero COVID policy in China. So a board closes completely. We're now heavily dependent on these big ships with containers and any sort of snag in that just-in-time sort of transmission of intermediary products leads to lots of problems. And we had those. The chips in the car industry, I think, are the prominent example of that. Cars was one of the things that the prices were completely out of line here in the United States. So I think that what has led to this is a particular problem in the supply chain. What I would say is that in my view, because there is, although there is a lot of protest and certain reorganization of the labor force, Amazon is being reunionized, it's still a weak labor force movement. So I don't think that we will have much from the side of distributive conflict. So it is basically just cost-push in my view. Not all the inflations are born equal. And the Latin American inflation in general, in particular the Argentinian, is tied to the exchange rate. And I think that's true for many peripheral countries. I think that that's also true in the case of Turkey. I wouldn't venture to talk a lot about that specific Turkish case, but I think it's also similar. In any country that depends significantly on the imports of intermediary and capital goods to the regular production, those are fundamentally obtained with dollars. So the dollar is still the fundamental currency of invoicing of exports, much larger than any other country. The same goes for reserves, its users reserve for central banks and so on and so forth. Once you depreciate the exchange rate, one of the effects that it's less well understood in advanced economies. If you depreciate the exchange rate and you have in your basket of consumption imported goods, the price of those go up. So your real wage goes down. So there is a direct impact on distribution from the changes in the exchange rate. And so what happens in countries like Argentina and other Latin American countries is that when the US goes and hikes the interest rate because they're trying to stop inflation, as Volcker did in the 70s, as Mr. Powell is doing right now, they speak very fast, increasing interest rates at a faster pace than any time in recent history. That attracts funds to the US and puts pressure on the local currencies, some more, some less. So Argentina doesn't have international reserves. It's a peculiar case, a mistake of policy made in the past. And that lack of reserves imply that they cannot control the exchange rate or manage it, as other countries do, so that so-called dirty flow or fear flow, whatever people call it these days. But under those circumstances, the exchange rate depreciates. When you have a depreciation of 30%, it's so large that even if the working class is not too strong, the government has to give some sort of adjustment to wages. So wages go up. But the price that wages going up make your products more expensive in foreign currency, so the government is forced to depreciate again. And so you end up with the spite of foreign exchange and wages rather than price wages. But the prices are going in the process up too. Inflation does get out of hand. And Argentina had a depreciation that good lord, it was more than 30%. You end up having inflation that accumulates, and we already had inflation at 50%. So this led us to a higher level of almost 100%. With the difference in the problem, the first thing that you have to do, so in the United States, see if the problem is not excess demand, there's no reason to hike the interest rate as we did so fast and perhaps risk throwing the economy into recession. You're going to have impacts in the housing market. The housing market has impact on consumption. So there is a very likely possibility of a recession in the US because of the monetary reaction to inflation. An overreaction that if it's essentially prices will come down because the price of oil and gas eventually might come down, hopefully. In the case of Latin America, as you see, the beginning of this is that it's the depreciation of the currency. So the first thing is that you have to have remuneration in domestic currency and pesos higher than the remuneration in dollars, adjusted for risk. And there is a great risk of holding Argentinian denominated assets. So the interest rate has to be high. It has to be high enough to attract flows or at least preclude capital flight. And so in that case, it is sensible, not just in Argentina. I say Brazil, a lot of people that I know, progressives were complaining that Brazil hiked the interest rate and managed to hold the exchange rate. But Brazil does have lower inflation. Bolivia, which I think it's one of the good cases of price stability, they have very low inflation, one of the lowest inflations in the last couple of years in which inflation got out of hand. And the exchange rate is fixed. So they have enough reserves, they did a policy that kept the exchange rates. They also have public supermarkets and those have allowed them to subsidize certain basic prices of certain goods that are consumed by large contingents of the population. So that also has been used as a tool to keep prices down. So there are alternative policies, but I certainly would think that there is a case to be made in peripheral countries and developing countries for higher rates of interest to stop the exchange rate. So the exchange rate is the channel through which you stabilize a lot of these economies. The problem with having just one theory is that one theory might be the wrong theory at the wrong time. And so it is important to have conversations about getting the right theory. So the diagnostic that you get from a pterodox theory for inflation is very different than the conventional theory analysis of what caused the inflationary pressures. In the 70s, if you read people like Tobin, Tobin, I think that the idea of conflict inflation within your classical economics is complicated. You have the issue that if distribution is determined by marginal productivity of capital and the marginal productivity of labor, so each factor of production gets according to its productivity, while they're unhappy with their share. So there is an issue. But taking aside that, Tobin was very open to the idea that inflation was caused by either one of these three, the man who caused push or distributive conflict. So that wasn't an atema for him. He was open to the discussion of things that didn't necessarily fit within his theoretical perspective. The importance of a pterodox economics is that it allows us to think certain things from, you know, look at it with a different lens and provide alternative solutions and perhaps looks at aspects of the problem that have not been sort of newly understood within the conventional framework. The other thing is that, you know, sometimes it allows you to look at different countries with different experiences and it shows peculiar sort of effects that might be, you know, relevant.