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Is that really the case though? I thought inflation is just when stuff gets more expensive, and how it’s caused is complicated. So, it can be increase in demand

Is that really the case though? I thought inflation is just when stuff gets more expensive, and how it’s caused is complicated. So, it can be increase in demand, decrease in supply, both on the buy and sell side (ie supply/demand of things, including dollars). I think it’s reasonable to say that the majority of the planet shutting down during the pandemic has at least as much to do with inflation as the fed’s monetary policy, if not much more.

thephyber 4y ago
I generally agree with your sentiment. Resuming economic activity after shut downs (and the habits the shut downs changed) is taking time. There is no obvious natural experiment to tease out how much is caused by CB interest rates and how much is fiscal policy. Most of the countries that did one also did the other. Also, data points on these issues are gathered monthly (if that often), so current analysis will miss a lot in the “fog of war” until there is more data to analyze.