Author: John Murphy
This paper indicates how the massive fiscal deficits financed through creation of fiat money by central banks worldwide (undertaken in response to the 2020 coronavirus pandemic) may lead to either hyperinflation or stagflation. The current situation is explained to be comparable to that leading to the hyperinflation in Germany in 1923 except on a broad international scale. However, a future tightening of monetary policies to inhibit ever rising inflation rates could instead result in stagflation resembling the 1970s. Possible alternative solutions to the current economic situation are discussed.