Understanding the COVID Era Inflation

The COVID era surge in inflation abruptly ended an unprecedented era of positive inflation performance, surprising major central banks and other economic observers. Similarly surprising has been the subsequent partial retreat of inflation, achieved thus far without material harm to employment or incomes. 

Many aspects of this critical episode in macroeconomic history remain poorly understood. Why was the inflation outbreak so sharp and so big? What underlying factors contributed to the outbreak? To what extent did central banks’ delayed responses exacerbate the situation? Was overly stimulative fiscal policy an important culprit? What factors explain the similarities and differences in inflation experiences of major US trading partners? Was the US Federal Reserve inhibited from responding more effectively by its culture or the new policy framework established in the early months of the pandemic? What lessons should policymakers take away for the next time a similar crisis engulfs the world? 

This project aims to bring new scholarship to bear on these important questions. Contributions to the project will be posted as they are completed, with the project expected to conclude in early 2025.