Inflation worries the government … less economists

Wednesday, September 15, at breakfast time, in the dining room of a financial institution, the back-to-school conversation revolved around inflation: was it necessary, yes or no, to worry about the acceleration in prices consumption observed since the summer? The answer was as rich in nuance as the aroma of the coffee cooling at the bottom of the cups.

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It could be summed up as follows: if inflation is a rather reassuring phenomenon in the eyes of economists, since it puts oil in the cogs of the recovery, it can be perceived less positively by households, who see their power of decline. purchase threatened. And therefore arouses a more worried reaction on the economic and social level, as evidenced by the responsiveness of the executive to announce, as of Thursday, an exceptional energy check which will benefit nearly six million French people.

“For people who had constant incomes, inflation translates well into an amputation of purchasing power” Alain Trannoy, economist

“We must remember that before the pandemic [de Covid-19], we have several years of very low inflation, so much so that central banks were worried about it, recalls the economist Alain Trannoy, director of studies at the Ecole des Hautes Etudes en Sciences Sociales. The fact that today, after the Covid crisis, we are back at around 2% inflation, which is the ECB’s objective, is therefore a very good thing. But, for people who had constant incomes, such as retirees, inflation does translate into an amputation of purchasing power. “

An amputation which can be all the more significant as the price increases mainly affect basic necessities such as energy and food products. Aggravating circumstance, the more modest the households, the more these products weigh, proportionally, in the portfolio: “Food represents about 12% of the budget of a wealthy household, but this ratio can double for the poorest., confirms Mr. Trannoy, hence a greater drop in purchasing power. “

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The reasoning is the same for energy. Retirees who live in rural areas and who heat themselves with fuel oil are much more affected than an urban executive living in a well-insulated apartment. In this regard, the “Energy check” appears as a “Good measure” in the eyes of the economist, who believes that it is better “Prevent than cure”.

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