Though they have received most of the attention, supply bottlenecks are hardly the only factor to consider when assessing the recent surge of inflation. Far more important are broader structural changes in the economy and the alarmingly complacent attitude of central banks.
FRANKFURT – After many years of low inflation, prices have risen almost everywhere in recent months. Energy and commodities have been leading the way, owing mainly to post-lockdown supply bottlenecks. But while such obstacles are widely seen as temporary, implying that the inflationary spike will disappear soon, other factors are at work as well, implying that it won’t.
FRANKFURT – After many years of low inflation, prices have risen almost everywhere in recent months. Energy and commodities have been leading the way, owing mainly to post-lockdown supply bottlenecks. But while such obstacles are widely seen as temporary, implying that the inflationary spike will disappear soon, other factors are at work as well, implying that it won’t.