Most central banks refer to global and Covid-19-related factors to explain the recent surge in inflation. However, several observers have recently questioned this narrative and argue that monetary policy is to blame.

Former Reserve Bank of New Zealand governor Graeme Wheeler and Bryce Wilkinson argue, for instance, that: “Pent-up demand led to increased spending as Covid restrictions eased. When the aggregate supply curve for an economy is sloped steeply, as in the case of Covid lockdowns, and