Senior central bankers and other officials continue to wrestle with the challenge of understanding inflation dynamics – and the even bigger problem of deciding what to do.

Central bankers face a dilemma as inflation rises around the world. On the one hand, climbing prices threaten their hard-won credibility. On the other, much of the rise in inflation comes from the supply side, which is generally considered out of reach of monetary policy instruments.

“Monetary policy cannot solve supply-side