Inflation, the global financial crisis, and COVID-19 pandemic
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In the years 2021–2022, world inflation has drastically increased. The analyses of the main characteristics of the 2007–2009 financial crisis and of the economic crisis caused by the COVID-19 pandemic as well as of the rise in total debt of the non-financial sector suggest that the growth in inflation was triggered by excessive debt growth of the government sector in 2020–2021. In that period, the main goal of the debt growth of the government sector was to finance the aid schemes limiting the negative effects of the COVID-19 pandemic. These aid programmes were indispensable to avoid deep and long-term global economic recession, however, their value was too high to keep inflation in the world under control. The fiscal intervention of particular countries should be co-ordinated internationally, as the cumulative result of the operations undertaken by particular states might have detrimental effects globally.
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