The most palatable strategy to reduce debt is to increase growth. Private growth will not flourish in an environment of macro instability. Fiscal sustainability and price stability are essentials, not luxuries. Private growth needs an enabling environment, including tax competitiveness and a framework for infrastructure investment. It needs a sound financial sector that is diverse, resilient and open.
In the medium to long term, wages and prices are closely correlated. The third sees rising inflation  BIS central bankers’ speeches  7  expectations. Finally, the fourth corresponds with rising growth expectations of firms and households. Which case are we looking for? In the case where import prices push up inflation, household real income is squeezed.