“The crisis is not over yet,” says Malmendier in an interview. She calls for targeted measures to get high inflation under control. Otherwise you run the risk of wasting money.
In her own words, Ulrike Malmendier is “greatly worried” about the high inflation in Germany. “The crisis is not over yet, core inflation is still too high,” said the economist to the “Welt am Sonntag”.
She called on the federal government to tailor its crisis aid for the population more precisely. “Reliefs aren’t bad in principle, they just have to be targeted and not spread out indiscriminately. Otherwise they’ll boost prices.” The tank discount for everyone was “just not accurate,” criticized the professor, who teaches at the University of California in Berkeley.
“We should define exactly which households we want to reach with which measure.” The German approach means that every crisis – whether Covid or high energy prices – is followed by a large spending program. “The advantage is the clear signal of ‘We can do it’,” said Malmendier. “At the same time, we run the risk of wasting too much money. After all, we want to be prepared for the next crisis.”
As a concrete improvement, the economist, who has been a member of the German Council of Economic Experts since last year, called for “better data” in Germany. For fear of a transparent person, the Germans are sometimes too careful to link the data from different authorities. “We could link government relief directly to income or existing liquid assets,” said Malmendier. “This data is in the Ministry of Finance, but it’s covered by tax secrecy. Why not get permission from those interested in aid to access it?”
Another example is the wage-price spiral. “Even we experts can’t currently say exactly whether it exists.” There is simply no up-to-date industry and company-specific data. “That can no longer be the case in the 21st century,” said Malmendier.
