The lagged effects of COVID-19 supply chain disruptions on inflation | Brookings
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Massive supply chain disruptions during the COVID-19 pandemic have fed into inflation with long lags, say Robin Brooks, Peter R. Orszag, and William E. Murdock III.
  • some_guy@lemmy.sdf.org
    2·
    3 months ago

    The COVID-19 inflation shock was initially seen as a sign of overheating, with many viewing the Federal Reserve as dangerously behind the curve.

    But given unprecedented supply chain disruptions, it is increasingly consensus that pandemic-era inflation was largely supply-driven.

    Firms’ margins have only begun to normalize, underscoring the long-lasting effects of COVID-19 disruptions.

    We expect inflation will keep falling, given the importance of lagged disinflation effects from supply normalization.