Resistance isn’t futile

7 Mar 2022 By Swaha Pattanaik Follow @swahapattanaik

Soaring energy prices amid the Ukraine invasion will stoke inflation, and the hit to consumers will hurt growth. But economic stagnation is not inevitable. The Covid-19 response showed how fiscal policy can mitigate shocks. It will mean accepting yet more Big Government.

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Oil prices on March 7 surged to their highest levels since 2008 as the United States and its European allies considered banning Russian oil imports. The price of Brent crude reached $139.13 a barrel while that of U.S. West Texas Intermediate hit $130.50.

The International Monetary Fund said on March 5 that the war in Ukraine and associated sanctions would have a severe impact on the global economy, noting that the crisis was creating an adverse shock to inflation and economic activity at a time when price pressures were already high.

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