Long-term data can shed light on current inflation – NBER paper

Banknotes at the Reichsbank, 1923
Banknotes at the German Reichsbank. Weimar Germany was one of many countries to suffer high inflation in the early 20th century

Economists looking for a historical parallel to the current inflationary surge should look back further than the 1970s, according to a new working paper.

Published by the US National Bureau of Economic Research, the paper uses a semi-structural model to identify the permanent component of the current inflationary surge.

Authors Stephanie Schmitt-Grohé and Martín Uribe find this component is much smaller when estimated over a long horizon – 1900–2021 – than if only the period from 1955–2021 is

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