Little risk of stagflation in Netherlands, says DNB
Wages are no longer inflation-linked and profits are higher, the Dutch central bank confirms.
The inflation that western economies are currently experiencing is unlikely to lead to a crisis like the stagflation of the 1970s, De Nederlandsche Bank argues.
This is especially the case in the Netherlands, DNB confirms in a note published on July 28. Unlike 50 years ago, wages are not linked to inflation, and businesses’ profits are higher, which is likely to preserve investment and employment, it argues.
In June, inflation grew year on year by 8.6% in the eurozone – a new record high. In
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