SHORTAGEFLATION 3.0. WAR ECONOMY - STATE CAPITALISM - PANDEMIC CRISIS

The crisis caused by the pandemic has induced governments and central banks to undertake non-orthodox actions aimed at the protection of people's living standards and the maintenance of production and service activities of enterprises. The policy of the aggressive rise in money supply has resulted in a considerable increase in budget deficits and foreign debts. In this context, it is important to seek an answer to the question how this can accelerate inflationary processes and to formulate proper suggestions addressed to economic policy. In fact, inflation now is higher than the official price indices because it is partly dampened. The rise in the general price level does not reflect fully the actual intensity of inflation. We have to do with a price and resource inflation, called shortageflation. Methodologically, it is interesting to compare this contemporary phenomenon (3.0) with inflation suppression in a war economy (1.0) and in the economies of real socialism (2.0). Such comparisons show some similarities of these processes but also significant differences due to the specific reactions of households and enterprises. The author discusses five channels of liquidating the excessive money resources and indicates the ways most advisable from the point of view of the sustainable development in the post-pandemic future. Especially important is to stimulate the transformation of a part of the inflationary money surplus into the market demand for goods and services which increases the utilization of the existing production potential and leads to investments which create new production capacities as well as the conversion of compulsory savings into voluntary savings.