Was The Post-COVID Inflation Surge Transitory?

This podcast episode delves into the complexities of the post-COVID inflation surge. By analyzing the news articles and expert opinions, we attempt to unpack whether inflation was a transitory or a permanent phenomenon, focusing on the US, UK, Japan, and Europe.
What we are referencing in our conversation:
0:24 - To look at monthly inflation data of the countries we will be discussing, check this spreadsheet which has compiled statistics from each respective Central Bank:[2] (docs.google.com/spreadsheets/d/1Fa7U6OHyTRZPCW…)
0:30 - The video by Dr. Schasfoort:[5] (youtube.com/watch?v=7GMSzNm6i_U)
1:04 - An article which further explores the definition of ‘permanent inflation’:[20] (financialpipeline.com/inflation-is-back-is-it-…)
1:29 - Further explanations on how monetary policy impacts inflation expectation:[21] (imf.org/en/News/Articles/2023/05/15/sp-role-in…)
1:36 - An article which further explores the definition of ‘transitory inflation’:[15] (forbes.com/sites/georgecalhoun/2023/03/06/what…) + inflation expectations[21] (imf.org/en/News/Articles/2023/05/15/sp-role-in…)
2:08 - An European Central Bank report showing how the majority of inflation in the EU and USA were supply-driven:[10] (ecb.europa.eu/pub/economic-bulletin/focus/2023….)
2:24 - An article by Larry Summers on how the post-COVID inflation surge is permanent due to mishandling of economic policy:[4] (hks.harvard.edu/centers/mrcbg/programs/growthp…)
2:40 - For further reading on how fiscal policy could have impacted inflation:[22] (cepr.org/voxeu/columns/demand-supply-imbalance…)
3:00 - Article on Christine Lagarde’s recent comments on permanent inflation:[3] (reuters.com/markets/rates-bonds/ecbs-lagarde-s…)
3:17 - To read more about how the Phillips Curve and Inflation Expectation interact with one another:[21] (imf.org/en/News/Articles/2023/05/15/sp-role-in…)
3:24 - Christine Lagarde’s initial comments:[24] (bloomberg.com/news/articles/2021-10-16/ecb-pol…)
3:31 - Joseph Stiglitz on transitory inflation:[23] (project-syndicate.org/commentary/us-inflation-…)
3:55 - Barsky & Kilian’s paper which examines previous oil shocks to examine why inflation rates were so high in the 1970s and 80s in the Western World:[8] (doi.org/10.1086/654439)
4:37 - See the historical interest rate data for the United States here:[25] (tradingeconomics.com/united-states/interest-rate)
4:45 - See the different types of Government support programmes in OECD countries here:[26] (oecd.org/coronavirus/policy-responses/governme…)
6:00 - A graphical representation of how inflation in the USA and EU is subsiding:[2] (docs.google.com/spreadsheets/d/1Fa7U6OHyTRZPCW…)
6:20 - Analysis based on report published by the European Central Bank on inflation dynamics in the EU and the USA:[1] (europarl.europa.eu/RegData/etudes/BRIE/2022/72…)729352_EN.pdf)
7:10 - See how Japan’s acute decline in working-age population compares to other developed economies:[27] (data.oecd.org/pop/working-age-population.htm)
7:25 - A Japanese newspaper that focuses on the Economy recently discusses how Trade Unions are increasing their expected wage increases given the labour shortage:[9] (nikkei.com/article/DGKKZO75354680X11C23A0EP0000)
7:39 - A report with further analysis into how Japan’s export industry has become less competitive with the population trends and currency dynamics:[28] (jri.co.jp/en/MediaLibrary/file/english/periodi…)
8:18 - Only mentioned implicitly, but we recommend this report by the Federal Reserve to see the role of markups in driving inflation:[29] (kansascityfed.org/research/economic-review/how…)
9:02 - Article on EU exodus from UK:[30] (ft.com/content/c837135e-60be-4ec6-ac14-78d5007…)
9:22 - Article on the British Currency Crisis in 2022:[31] (bloomberg.com/news/articles/2022-12-09/the-pou…)
9:43 - A brief analysis by Bloomberg on how decoupling following Brexit has disproportionately affected the UK economy:[11] (bloomberg.com/news/articles/2023-06-05/why-is-…)
10:36 - Academic paper examining the delay between monetary policy implementation and impact:[32] (ijcb.org/journal/ijcb13q4a2.htm)
11:19 - Article noting the unprecedentedly aggressive policy tightening done by Central Banks:[33] (bloomberg.com/news/articles/2022-01-27/fed-set…)
12:25 - Research institute analyses the impact of fiscal responses to the pandemic and how it resulted in structural changes in the global economy:[17] (cepr.org/voxeu/columns/demand-supply-imbalance…)
12:37 - The IMF’s analysis on how external events such as Russia’s invasion of Ukraine contributed to inflation:[6] (elibrary.imf.org/view/journals/001/2022/241/ar…)
13:52 - World Bank article on the supply disruption and subsequent inflation in Pakistan following the 2022 floods:[34] (worldbank.org/en/news/press-release/2022/10/06…)
14:06 - United Nations highlights the vulnerability of supply from increasing extreme weather events:[35] (news.un.org/en/story/2023/07/1138712)
15:52 - Emerging trends of deglobalisation and militarisation are highlighted in this IMF report:[19] (imf.org/en/Publications/WEO/Issues/2023/10/10/…)
Further recommended readings:
[13] (ft.com/content/2c3fc086-b543-4efe-b696-8c84aa9…): A further analysis of whether Quantitative Easing, a particularly controversial tool for monetary expansion which was widely used for COVID-era stimulus, contributed to inflation or not.
[14] (web.archive.org/web/20090719220308/http://www.…): A Bank of Japan report on what Quantitative Easing as a tool is used to address in the Economy (Note: compare it to the state of the global economy in 2020 - is it applicable?)
[18] (imf.org/en/Publications/WP/Issues/2023/08/31/U…): An assessment of the impact of fiscal policy on the Post-COVID inflation surge
References
[1]:Höflmayr, M. (2022). Inflation explained: What lies behind and what is ahead? (europarl.europa.eu/RegData/etudes/BRIE/2022/72…)729352_EN.pdf)
[2]:Historical inflation data for the countries of interest, 1971-2023 (docs.google.com/spreadsheets/d/1Fa7U6OHyTRZPCW…) (All sources and economic data are aggregated in this spreadsheet)
[3]:Koranyi, B. & Canepa, F. (2023, June 27). ECB's Lagarde sees no rate peak call near-term. (reuters.com/markets/rates-bonds/ecbs-lagarde-s…)Reuters …