Inflation? The workforce is the bigger problem

People walk through downtown Manhattan in New York City. - AFP

THIS week’s unexpected rise in US inflation is an opportunity to revisit an old debate, which is often a useful exercise. This current bout of inflation has its roots in mistaken assumptions made a decade ago.

After the 2008-2009 recession, the recovery in the labour market was notoriously slow. This was commonly blamed on the demand side; monetary and fiscal policy could have done more, it was said, to stimulate recovery.