Affiliation:
1. 543 Kravis Hall, Columbia University , 665 West 130th Street, New York, NY 10027, USA . email: jes322@columbia.edu
2. Macroeconomic Analysis, Roosevelt Institute , 570 Lexington Avenue, 5th Floor, New York, NY 10022, USA . email: iregmi@rooseveltinstitute.org
Abstract
AbstractOver the last couple years, the world has experienced the highest levels of inflation in more than four decades. This paper provides a framework for analyzing the causes and the appropriate responses. We show that it is not caused by an excess of aggregate demand, and in particular, not caused by any excess consumption arising from excessive pandemic spending, but by supply-side shocks, largely induced by the pandemic (e.g., chips), and also by the war in Ukraine, combined with sectoral demand shifts. We analyze the role played by market power and the lack of resilience. Increases in interest rates, beyond normalizing levels, will do little to address the underlying problems and may exacerbate them, impeding effective responses to supply shortages. The paper describes alternative fiscal and other measures that, while addressing current inflation, have further long-term welfare benefits.
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics,General Economics, Econometrics and Finance,Management of Technology and Innovation
Reference130 articles.
1. Disentangling rent index differences: data, methods, and scope;Adams,2022
2. Unfinished business in the macroeconomics of low inflation: a tribute to George and Bill by Bill and George;Akerlof;Brookings Papers on Economic Activity,2007
3. Excess savings during the COVID-19 pandemic;Aladangady,2022
4. Larry Summers says US needs 5% jobless rate for 5 years to ease inflation;Aldrick,2022
5. Why Taxpayers Owed $500 Billion in Taxes When They Filed This Year;Arnon,2022
Cited by
13 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献