Fiscal policymakers also face a difficult choice - Stagflation Tapering Roubini

A stagflationary negative supply shock poses a dilemma for central bankers. Because they care about anchoring inflation expectations, they need to normalize monetary policy quickly, even though that will lead to a further slowdown and possibly a recession.

But because they also care about growth, they need to proceed slowly with policy normalization, even though that risks de-anchoring inflation expectations and triggering a wage-price spiral.

But another risk is that monetary policy will be constrained by the threat of a debt trap. 

With private and public debt levels at historic highs as a share of GDP, central bankers can take policy normalization only so far before risking a financial crash in debt and equity markets.

Project Syndicate 30 March 2022

https://www.project-syndicate.org/commentary/stagflationary-environment-putins-war-no-optimal-policy-response-by-nouriel-roubini-and-brunello-rosa-2022-03