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The labour market – supporting the economy or fuelling inflation?

· Joachim Nagel, President of the Deutsche Bundesbank (Germany)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability, labour markets and jobs

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· Joachim Nagel Wiki · Deutsche Bundesbank WikiThe labour market – supporting the economy or fuelling inflation?

ContextSpeech at the OMFIF Economic and Monetary Policy Institute in Edinburgh; the Bundesbank is Germany's central bank within the euro system and watches tight labour markets.

Why it mattersNagel suggests immigration could ease labour shortages that fuel inflation.

Problems raised
  1. Underlying domestic inflation is rising.
  2. The labour market is tight.
  3. Demographics reduce labour supply.
Solutions proposed
  1. Keep monetary policy on course.
  2. Use immigration to partly offset labour shortages.
  3. Maintain high rates until inflation falls.
Read full speech on bis.org ↗

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