Subject. Inflation management in developed countries in the post?COVID?19 period. Objectives. To critically assess the effectiveness of traditional monetary instruments (interest rate hikes) versus alternative fiscal approaches under Modern Monetary Theory (MMT) in the context of post?pandemic inflation. Methods. A comparative historical and economic analysis is applied, using empirical data from the USA, Europe, and Japan, along with a decomposition of inflationary factors according to A. Shapiro’s methodology. Results. It was found that traditional monetary instruments proved to be largely ineffective against inflation driven by supply?side shocks (supply chain disruptions, energy crisis). Despite rate hikes, central banks were unable to quickly bring inflation back to target levels. The MMT?oriented approach, focused on fiscal measures — targeted subsidies, investment in capacity, and cost compensation — demonstrated effectiveness, as illustrated by the case of Japan. Conclusions. Policy instruments need to be adapted to the nature of inflationary shocks: in the case of supply?driven inflation, fiscal measures may be more effective and less detrimental than monetary tightening. The study contributes to the discussion on the role of central banks and substantiates the potential for synergy between monetary and fiscal instruments for macroeconomic stabilization in the post?pandemic period.
Keywords: MMT, macroeconomic policy, fiscal policy, mainstream, economic theory
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