Post-Covid inflation in US mainly driven by demand – study
Author says findings help account for Fed’s difficulty in achieving 2% target
Demand, more than supply factors, has been responsible for driving high inflation since the pandemic, research by the Federal Reserve Bank of San Francisco argues.
The working paper, published on April 24, uses two Phillips curve-type regressions to assess the contributions of demand and supply forces to inflation in the US following the 2008 financial crisis and from the onset of the pandemic in February 2020.
The author Kevin Lansing acknowledges that supply’s contribution to inflation was
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