Template-Type: ReDIF-Paper 1.0
Author-Name: Flora Budianto
Author-X-Name-First: Flora
Author-X-Name-Last: Budianto
Author-Name: Giovanni Lombardo
Author-X-Name-First: Giovanni
Author-X-Name-Last: Lombardo
Author-Name: Benoit Mojon
Author-X-Name-First: Benoit
Author-X-Name-Last: Mojon
Author-Name: Daniel Rees
Author-X-Name-First: Daniel
Author-X-Name-Last: Rees
Title: Global reflation ?
Abstract: Inflation has risen in many countries. In conjunction with a rebound in GDP growth and evidence of significant bottlenecks in some sectors, this has prompted concerns that the low inflation era of recent decades could be nearing its end.
A closer look at the data reveals that the pickup in inflation can be ascribed largely to base effects, increases in the prices of a small number of pandemic-affected items and higher energy prices. A common thread through these causes is that their effect on inflation is likely to be temporary.
A more persistent increase in inflation would likely require a material pickup in labour costs and an unmooring of inflation expectations. However, wage growth remains contained and the medium-term inflation expectations of professional forecasters and financial markets show little sign of de-anchoring. These developments are consistent with medium-term inflation moving towards central bank targets.
Length: 9 pages
Creation-Date: 2021-07-15
File-URL: https://www.bis.org/publ/bisbull43.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull43.htm
File-Format: text/html
Number: 43
Handle: RePEc:bis:bisblt:43