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00:00WE ' RE BACK WITH ALEX FRIEDMAN. WE ARE TALKING A LITTLE ABOUT INFLATION. WHY IS THERE AN INFLATIONARY PRESSURE IN EUROPE? IS IT STRUCTURAL OR A SHIFTING ECONOMY? ALEX: THAT IS A BIG QUESTION AND IT IS UNCLEAR FOR MUCH OF THE WORLD. I SUPPOSE THERE ARE PROBABLY THREE OR FOUR REASONS. CYCLICAL CHANGES TO EMPLOYMENT TEND NOT TO DRIVE WAGE INFLATION CHANGES. PEOPLE RUNNING COMPANIES THINK THEY ARE TEMPORARY AND THEY ARE FOCUSED ON WHAT THE MARKET LOOKS LIKE. THERE IS A LOT OF JOB INSECURITY . THERE ' S LESS UNIONIZATION. AT THE SAME TIME, TECHNOLOGY EFFICIENCIES HAVE PROBABLY MADE IT HARDER FOR COMPANIES TO PASS ON INCREASES IN PRICES THAT DRIVE INFLATION. FRANCINE: IS IT A SIMILAR PROBLEM THAT WE HAVE HAD WITH THE FED? IS IT A DIFFERENT DYNAMIC THAN WHEN WE SAY, THERE IS NOT ENOUGH WAGE GROWTH THAN WHERE WE WANTED TO BE? ALEX: I THINK THAT IS TRUE GLOBALLY. FRANCINE: DOESN ' T MEAN WE ARE MEASURING THINGS WRONG? BECAUSE OF TECHNOLOGY AND THINGS LIKE THAT, MAYBE INFLATION SHOULD NOT BE AT THE FOREFRONT OF OUR MIND, BUT WE LOOK AT IT DIFFERENTLY? ALEX: IT IS POSSIBLE. THE LAST TIME THE CENTRAL BANKERS SAID TECHNOLOGY WAS CHANGING THE PARADIGM WAS RIGHT

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GAM Holding CEO Sees Global Lack of Inflationary Pressure

Alexander Friedman, chief executive officer at GAM Holding AG, discusses the factors behind the global lack of inflation. He speaks with Bloomberg's Francine Lacqua on "Bloomberg Surveillance." (Source: Bloomberg)

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