Green Prices

Whoops:

After arguing that the 2% inflation number is an “arbitrary” number and going from 3% to 2% isn’t worth it, El-Erian said that “if you were to establish an inflation target today based on the secular issues, and let’s talk about it, the domestic paradigm is changing. We’re no longer in this Washington consensus of deregulation, liberalization, and fiscal prudence. We are in a world of industrial policy, government intervention, and fiscal irresponsibility. Let’s talk about the international, we’re no longer talking about…globalization. We’re talking about fragmentation. Then look at the transitions we have, we have major transitions going on, not just generative AI, life sciences, and sustainable energy, we have things happening in health care, you have things happening in defense, you have things happening in food security. If you put all that together, it is a different inflationary environment. It’s a world that’s subject to higher inflation, and we’ve come from a world that was subject to lower inflation.”

Green costs more green...