Preisspirale

A Preisspirale, also known as a price spiral, is an economic phenomenon characterized by a self-reinforcing cycle of rising prices and wages. Typically associated with periods of inflation, the Preisspirale occurs when an initial increase in prices leads to higher wage demands as workers seek to maintain their purchasing power. The resulting wage hikes, in turn, contribute to further increases in production costs, prompting businesses to raise prices again. This cycle can create a continuous upward trajectory of both wages and prices, making inflation difficult to control.

The concept is often linked to inflationary environments where prices and wages are flexible and responsive to each other. It can begin with various triggers, such as expansionary monetary policies, supply shocks, or fiscal stimuli, which push prices upward. Once wage increases follow suit, the inflationary spiral can become self-perpetuating.

Preventing or breaking the Preisspirale typically involves implementing monetary and fiscal policies aimed at stabilizing prices, such as interest rate adjustments, inflation targeting, or wage controls. Historically, periods of hyperinflation or chronic inflation often feature prominent Preisspirale dynamics, which can undermine economic stability, reduce purchasing power, and erode savings.

Economists emphasize that managing expectations plays a crucial role in controlling price spirals. If consumers and workers anticipate continued inflation, their behavior may exacerbate the cycle, making the problem more difficult to resolve. Addressing the Preisspirale requires coordinated policy measures to ensure inflation remains in check and to restore confidence in the economic environment.