Inflation still in the wind

Nobel laureate Paul Krugman wrote in a column that inflation may be temporary once the pandemic is under control.

However, the economist Mohamed El-Erian, president of Queens' College, Cambridge and an adviser to Allianz, predicted that supply-chain disruptions worldwide may last a couple of years and high prices may bring 1970s-style stagflationary headwinds to the global economy.

Small businesses across the globe continue to suffer from shortages and delays of key resources due to disruptions in the supply chain.

Such issues will be "complicating corporate and policy plans, and could undermine investments based on the ample liquidity injections from central banks that have pushed many markets ever higher," the veteran economist said in a Financial Times op-ed on Monday.

Added to inflation already in the pipeline, this can result in a stagflationary environment for the global economy that may be unfamiliar to people who did not live through the 1970s, El-Erian wrote.