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What Does It Sound Like When You Hear Inflation Rose 8% in May?

The Consumer Price Index picked up by 8.6 percent, as price increases climbed at the fastest pace in more than 40 years (New York Times).

If you don’t think about it too hard, it sounds like prices rose 8.6% in May. But that’s not true.

The Department of Labor’s Consumer Price Index actually rose 1.0% in May. The 8.6% increase refers to the fact that the index was 8.6% higher than a year ago.

Would it be too hard for news people to write headlines that clearly conveyed what happened? No, but it wouldn’t sound as “newsworthy” (i.e. interesting) to say prices rose 1.0% in May or that they rose 8.6% in the past year.

What makes this especially annoying is that this is how the government announced the latest inflation news:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.6 percent before seasonal adjustment.

The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.

The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles.

It’s so much easier to simply say, as the Wall Street Journal did:

Inflation Reaches 8.6% in May

Back to the New York Times for an explanation, not a headline:

In the short term, high inflation can be the result of a hot economy — one in which people have a lot of surplus cash or are accessing a lot of credit and want to spend. If consumers are buying goods and services eagerly enough, businesses may raise prices because they lack adequate supply. Or companies may choose to charge more because they realize they can raise prices and improve their profits without losing customers.

But inflation can — and often does — rise and fall based on developments that have little to do with economic conditions. Limited oil production can make gas expensive. Supply chain problems can keep goods in short supply, pushing up prices.

The inflationary burst America has experienced this year has been driven partly by quirks and partly by demand.

On the quirk side, the coronavirus has caused factories to shut down and has clogged shipping routes, helping to limit the supply of cars and couches and pushing prices higher. Airfares and rates for hotel rooms have rebounded after dropping in the depths of the pandemic. Gas prices have also contributed to heady gains recently.

For those who think gas prices are all Biden’s fault, a word from the Deputy Director of the National Economic Council:

A big reason gas prices are up is because companies cut refinery capacity in 2020 under the last administration [you know who’s]. US refinery capacity went down by 800,000 barrels per day. Refiners are now making bigger [profits by] raising prices at the pump.

The second big reason gas prices are up is Putin’s actions in Ukraine and the global response raising oil prices. Pump prices are up more than $1.60 since then. Our response had the backing of Republicans…

At any rate, here is US oil production in thousands of barrels starting in 2020, a year before Biden took office (there is no Biden “War on Oil”):

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And back to the Times:

But it is also the case that consumers, who collectively built up big savings thanks to months in lockdown and repeated government stimulus checks, are spending robustly and their demand is driving part of inflation. They are continuing to buy even as costs … rise, and they are shouldering increases in rent and home prices. The indefatigable shopping is helping to keep price increases brisk….

Officials say they do not yet see evidence that rapid inflation is turning into a permanent feature of the economic landscape, even as prices rise very quickly.

But nobody knows for sure. One thing I do know is that the Republicans who are blaming Democrats for high inflation have no plan to address it, and cutting taxes for the rich and corporations (their standard, well, only policy idea) would make inflation worse.

In case you’re really interesting, here are the monthly price increase for the past 13 months, which, by my arithmetic, add up to more than 8%:

MAY ’21 +0.7%   JUNE +0.9%   JULY +0.5%      AUG. +0.3%        SEPT. +0.4%              OCT. +0.9%        NOV. +0.7%    DEC. +0.6%     JAN. ’22 +0.6%    FEB. +0.8%          MARCH +1.2%   APRIL +0.3%   MAY +1.0%

I bet June will be lower.

Professor Krugman Says This Isn’t Ordinary Inflation

Paul Krugman is Distinguished Professor of Economics at the Graduate Center of the City University of New York and a columnist for The New York Times. He knows what he’s talking about but admits mistakes (this is from his Times newsletter):

Back in 2010 a group of conservative academics, economists and money managers signed an open letter warning that the efforts of the Federal Reserve to support the economy would be dangerously inflationary. But the inflation never came. So four years later, Bloomberg reached out to as many of the signatories as it could, to ask what happened.

Not one was willing to admit having been wrong.

I don’t want to be like those guys. So I’m currently spending a fair bit of time trying to understand why my relaxed view of inflation early last year has been refuted by events. What I want to do today is share where I am now on that topic and what my current take says about future policy.

Last spring the debate was focused on the American Rescue Plan, the Biden administration’s large spending package. A number of economists, including Larry Summers, Olivier Blanchard and Jason Furman, warned that it would overstimulate the economy — that output and employment would soar to levels that would create a lot of inflationary pressure.

Those of us on the other side argued that the risks of excess spending were much less than they warned — that large parts of the Biden package, like aid to state and local governments, would end up being disbursed gradually over time and therefore not have that much of an inflationary impact. To use the jargon, I argued that the [American Rescue Plan] would have a low “multiplier” [The multiplier effect measures the impact that a change in investment will have on final economic output, so that a low multiplier means less inflation.]

So here’s the funny thing: The multiplier does indeed seem to have been low. The economy has expanded fast, but it started in a deep hole and at this point is still if anything a bit below its pre-pandemic trend.

Here, for example, is real gross domestic product:

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The Congressional Budget Office regularly publishes projections of “potential” G.D.P. — the level of output consistent with stable inflation. So far the official numbers through the third quarter of 2021, extended by private estimates of growth in the fourth quarter, still put us slightly below what we thought the economy’s potential was going to be.

Here’s another number, the employment rate of prime-age adults, which has generally been a good indicator of the state of the labor market (probably better than the unemployment rate):

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We’ve seen a strong recovery in employment, but we’re still significantly below pre-pandemic levels.

The point is that if you had told me a year ago that this is what current output and employment numbers would be, I wouldn’t have predicted soaring inflation. To put it another way, my expectations of a relatively muted effect of government outlays on demand were more or less vindicated. But of course my expectations of moderate inflation weren’t. So what happened?

Part of the answer lies in supply-chain issues. Overall demand hasn’t grown all that fast, but fear of face-to-face interactions has skewed demand away from services toward goods, overstraining shipping and in some cases manufacturing capacity. These issues account for a lot of recent inflation, but in a way they don’t worry me too much: The private sector has huge incentives to get stuff moving, so sooner or later supply-chain issues will fade away.

However, it’s not just the supply chain; it’s obvious that we’re now experiencing widespread labor shortages even though employment is still below its prepandemic level.

I mentioned that the employed percentage of prime-age adults has generally been a good indicator of the state of the labor market. Another good indicator is the rate at which workers are quitting their jobs: Quits are high when people believe that new jobs are easy to find. Normally these two measures move in tandem; but something has changed.

Here’s a scatter plot of the prime-age employment rate against the quit rate since 2001; the blue dots represent the pre-pandemic era, the red dots the era since early 2020:

[Krugman has a diagram that I totally fail to understand, so you’ll have to imagine it.]

You can see [or imagine] the close relationship between the two measures [the prime-age employment rate and quit rate] before 2020. Since then, however, the relationship seems to have shifted, so a labor market that seems only OK judging by the employment rate looks extremely tight judging by the number of people who are quitting. And wages are rising rapidly, which suggests that quits are telling the real story.

What we’re seeing, of course, is the Great Resignation — which is also, to an important extent, a Great Retirement. A recent blog post from the International Monetary Fund shows that there has been a surge in the number of older Americans (and Britons) choosing not to be in the labor force. . . . 

Now, a labor market in which jobs are easy to find and workers can bargain for higher wages is a good thing. But the fact that labor markets are so tight even though employment and real G.D.P. are below pre-pandemic projections suggests that we can’t rely on those projections to assess the economy’s productive capacity. For whatever reason or reasons — presumably linked to Covid-19 — the U.S. economy apparently can’t sustainably produce as much as we expected [and scarcity means rising prices].

And that in turn tells us that it’s time for policymakers to pivot away from stimulus — in particular, that the Federal Reserve is right to be planning to raise interest rates in the months ahead. As I read the data, it doesn’t call for drastic action: The Fed should be taking its foot off the gas pedal, not slamming on the brakes. But that’s a story for another day.

For now, the moral is that because of Covid-19, we can’t assess where we are simply by comparing our situation with the pre-pandemic trend [i.e. the normal state of affairs]. . . . 

Unquote.

In other words, inflation, a global phenomenon, not one restricted to the US, is principally an effect of economies adjusting to a fading pandemic, another global phenomenon, which is not business (or economics) as usual. 

Behind the Screaming Headlines About Inflation

Any commentary on inflation that doesn’t take into account the pandemic is worthless. With the Delta variant and now Omicron, the economy isn’t functioning normally. The virus is limiting the supply of goods and services, while Americans have more disposable income than before the pandemic. Reduced supply and increased demand means inflation. What will happen with inflation after Omicron peaks, sometime in the near future? Nobody knows, but perhaps inflation hysteria isn’t justified? 

What the Bureau of Labor Statistics reported today:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis after rising 0.8 percent in November . . .  Over the last 12 months, the all items index increased 7.0 percent before seasonal adjustment. The energy index rose 29.3 percent over the last year and the food index increased 6.3 percent.

Increases in the indexes for shelter and for used cars and trucks were the largest contributors to the seasonally adjusted all items increase. The food index also contributed, although it increased less than in recent months, rising 0.5 percent in December. The energy index declined in December, ending a long series of increases; it fell 0.4 percent as the indexes for gasoline and natural gas both decreased. . . . 

A brief summary from Catherine Rampell of The Washington Post:

Since Covid began, consumer spending has risen a ton — especially for goods and especially for durable goods. Services up a little since February 2020, but not much.
At exactly the same time goods are in much higher demand, supply chains for goods have snarled. Hence, price spikes.

[Today’s report shows] once again, durable goods (cars, TVs, computers, appliances) in the lead for inflation, at 16.8% year-over-year, not seasonably adjusted.

Nondurables (food, clothing) in 2nd place at 10.2%. Services (travel, healthcare, education) with the least price growth at 4%, in part because so many services remain high risk.

Durables are by definition durable—we don’t need to buy/replace them often. Many expected that demand for durables (and therefore price pressures) would eventually run out of steam; how many fridges can people buy? Durable spending has slowed recently but is still way up compared to pre-Covid.

Maybe the demand for durables fades, supply chains unsnarl, price pressures recede. That would be good. Then the question becomes – what happens to services? Services inflation has generally been lower than goods inflation…but rents (a service) have been rising, and those are “sticky”.

Anther reason to worry that inflation might persist for a while yet, even as supply chains untangle themselves, is inflation expectations. Expectations of higher prices can become self-fulfilling.

An overview and the political context from Rep. Tom Malinowski (Democrat-NJ):

Virtually everyone agrees on the cause of the harmful inflation we’re experiencing: people have more money to spend, but that demand is chasing too little supply. But who we blame and how we propose to solve it reveals a lot about our political divide.

It’s an incredible fact that despite one of the worst economic crashes in our history, average Americans (not just the super rich) have more household wealth to spend today than they did before the pandemic. 

Government spending — bailing out small businesses and state & local governments, helping people who lost jobs, stimulus checks & the child tax cut — worked to rescue our economy and left Americans with the extra cash we are now trying to spend (i.e., higher demand).

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Had the government not done those things, it’s absolutely true that there would [be less] inflation now. 

But we also wouldn’t have amazing economic growth with historically low unemployment [and higher wages across the country]. Millions of Americans would be destitute.

So when you hear people blame “Biden spending” for inflation, what they’re saying is that you should have less money to spend . . . that your wages should be lower; that your taxes should be higher; that the government should have let your employer or municipality go bankrupt.

What most Democrats are saying is that increased demand (more people with more money to spend) is a good thing!  And that the way to beat inflation is to help the supply of goods and services in the economy to catch up to healthy consumer demand.

We’re focused on improving efficiency of our ports and delivery systems, which helped greatly during the holiday season. Some good news: The port of New York/New Jersey is moving 20%+ more goods than before the pandemic without delays. . . . As Omicron passes in the US, our labor disruptions will ease. But we must also get more people vaccinated in countries where COVID has shut down factories critical to our supply chains.

Crushing COVID is obviously critical to fighting inflation. As Omicron passes in the US, our labor disruptions will ease. But we must also get more people vaccinated in the US and in countries where COVID has shut down factories critical to our supply chains.

If you’re concerned about inflation, you should also support letting employers legally hire people already in the US who desperately want to work the jobs now being unfilled — and back politicians who would rather fix the economy than demonize immigrants.

To sum up: The solution to inflation is not to squeeze middle class Americans as Republicans are suggesting, so that we have less to spend on cars, food, and travel. The solution is to build back supply chains resilient enough to meet American consumers’ post-pandemic needs.

Finally, from The Washington Monthly, how lack of competition (and missing anti-trust enforcement) has made the supply chain so vulnerable:

In recent weeks, senior Biden administration officials have been arguing that monopolization explains at least some of the inflation that is eroding the otherwise impressive wage gains average Americans are experiencing. The case they make is that firms in concentrated industries are using their excessive market power to raise prices and fatten their bottom lines at the expense of consumers. They point specifically to industries like oil and gas and meat processing, where corporate profits are skyrocketing.

. . . In the meat industry, thanks to lax antitrust enforcement, four companies now control 55 to 85 percent of the markets for beef, pork, and poultry. Since the fall of 2020, the price of beef has risen by more than 20 percent, far higher than the inflation rate. At the same time, the profits of the meat-packing industry are up more than 300 percent. Consolidation is hardly limited to the meat industry. It is rampant throughout the economy. So too are recent corporate profit rates . . .

But for argument’s sake, let’s say that . . . predatory pricing by oligopolistic firms isn’t driving the current inflation, but rather, “supply chain hiccups” brought on by pandemic induced labor shortages and high demand. The question is, why were the supply chains so fragile in the first place?

The answer is monopoly—in particular, the hollowing out of capacity as a result of industry consolidation and Wall Street’s demand for short term profits. Consider the case of semiconductors—crucial components in most of the products we use. As recently as a decade ago, America was producing vast numbers of cutting-edge semiconductors right here on our shores. Since then, . . . the federal government has allowed the biggest domestic manufacturer, Intel, to buy up or drive out most of its U.S. competitors. The firm then offshored or sold off its U.S. manufacturing capacity to reduce costs. That boosted Intel’s stock price and delighted investors. But it left the company with scant domestic capacity to increase supply when COVID-19 shut down Asian semiconductor factories. The falloff in semiconductor supply has led, in turn, to shortages of, and higher prices for, everything from cars to cell phones.

Or consider the cargo ships that haven’t been able to get products into and out of U.S. ports. That, too, is a problem exacerbated by monopoly. Ocean shipping was a highly regulated industry until a quarter century ago . . . That led to three vast carrier alliances, all foreign owned, gaining control of 80 percent of the ocean shipping market. These alliances then built super-sized cargo ships that can only dock in a few ports, like the ones in Los Angeles and Long Beach, which now service 40 percent of all U.S. traffic. This highly consolidated system kept shipping prices, and hence overall inflation, low for years. Now, its brittleness is contributing to inflation.

Once supplies do land in U.S. ports, there are not enough trucks and truck drivers to deliver products to our warehouses and stores. In the recent past, however, many of those goods were delivered by freight rail. Why aren’t those goods now moving on trains? Because . . . the federal government allowed the railroad industry to monopolize. And the Wall Street hedge funds that control those monopolies have more recently demanded that they rip up tracks, mothball rail cars, and lay off seasoned union employees to get costs down and stock prices up. Now our freight rail system doesn’t have the capacity to take up the slack. . . . 

Of course, it took decades, and countless bad decisions in Washington, for our supply chains to become as concentrated, uncompetitive, and breakable as they are now. It will take years of strong antitrust enforcement and other measures to set things right.

What Goes Up, Will Go Down (Eventually)

Someone on Twitter said news people are covering inflation — a global post-pandemic phenomenon, not a Biden one — as if it’s 6,000%, not 6%, and we’re all pushing wheelbarrows of cash to the grocery store. On economic matters, I appreciate the views of Paul Krugman (Ph.D. Massachusetts Institute of Technology; currently Distinguished Professor of Economics, Graduate Center of the City University of New York):

Back in July the White House’s Council of Economic Advisers posted a thoughtful article to its blog titled, “Historical Parallels to Today’s Inflationary Episode.” The article looked at six surges in inflation since World War II and argued persuasively that current events don’t look anything like the 1970s. Instead, the closest parallel to 2021’s inflation is the first of these surges, the price spike from 1946 to 1948.

Wednesday’s consumer price report was ugly; inflation is running considerably hotter than many people, myself included, expected. But nothing about it contradicted C.E.A.’s analysis — on the contrary, the similarity to early postwar inflation looks stronger than ever. What we’re experiencing now is a lot more like 1947 than like 1979.

And here’s what you need to know about that 1946-48 inflation spike: It was a one-time event, not the start of a protracted wage-price spiral. And the biggest mistake policymakers made in response to that inflation surge was failing to appreciate its transitory nature: They were still fighting inflation even as inflation was ceasing to be a problem, and in so doing helped bring on the recession of 1948-49.

About Wednesday’s price report: It looked very much like the classic story of inflation resulting from an overheated economy, in which too much money is chasing too few goods. Earlier this year the rise in prices had a narrow base, being driven largely by food, energy, used cars and services like air travel that were rebounding from the pandemic. That’s less true now: It looks as if demand is outstripping supply across much of the economy.

One caveat to this story is that overall demand in the United States actually doesn’t look all that high; real gross domestic product, which is equal to real spending on U.S.-produced goods and services, is still about 2 percent below what we would have expected the economy’s capacity to be if the pandemic hadn’t happened. But demand has been skewed, with consumers buying fewer services but more goods than before, putting a strain on ports, trucking, warehouses and more. These supply-chain issues have been exacerbated by the global shortage of semiconductor chips, together with the Great Resignation — the reluctance of many workers to return to their old jobs. So we’re having an inflation spurt.

On the plus side, jobs have rarely been this plentiful for those who want them. And contrary to the cliché, current inflation isn’t falling most heavily on the poor: Wage increases have been especially rapid for the lowest-paid workers.

So what can 1946-48 teach us about inflation in 2021? Then as now there was a surge in consumer spending, as families rushed to buy the goods that had been unavailable in wartime. Then as now it took time for the economy to adjust to a big shift in demand — in the 1940s, the shift from military to civilian needs. Then as now the result was inflation, which in 1947 topped out at almost 20 percent. Nor was this inflation restricted to food and energy; wage growth in manufacturing, which was much more representative of the economy as a whole in 1947 than it is now, peaked at 22 percent.

But the inflation didn’t last. It didn’t end immediately: Prices kept rising rapidly for well over a year. Over the course of 1948, however, inflation plunged, and by 1949 it had turned into brief deflation.

What, then, does history teach us about the current inflation spike? One lesson is that brief episodes of overheating don’t necessarily lead to 1970s-type stagflation — 1946-48 didn’t cause long-term inflation, and neither did the other episodes that most resemble where we are now, World War I and the Korean War. And we really should have some patience: Given what happened in the 1940s, pronouncements that inflation can’t be transitory because it has persisted for a number of months are just silly.

Oh, and for what it’s worth, the bond market is in effect predicting a temporary bump in inflation, not a permanent rise. Yields on inflation-protected bonds maturing over the next couple of years are strongly negative, implying that investors expect rapid price rises in the near term. But longer-term market expectations of inflation have remained stable.

Another lesson, which is extremely relevant right now (hello, Senator Manchin), is that an inflation spurt is no reason to cancel long-term investment plans. The inflation surge of the 1940s was followed by an epic period of public investment in America’s future, which included the construction of the Interstate Highway System. That investment didn’t reignite inflation — if anything, by improving America’s logistics, it probably helped keep inflation down. The same can be said of the Biden administration’s spending proposals, which would do little to boost short-term demand and would help long-term supply.

So yes, that was an ugly inflation report, and we hope that future reports will look better. But people making knee-jerk comparisons with the 1970s and screaming about stagflation are looking at the wrong history. When you look at the right history, it tells you not to panic.

Unquote.

What news people should be extremely worried about is the Republican Party’s attack on democracy and majority rule (but that wouldn’t be “balanced”).

“Largely Inevitable As Economies Try To Restart After Epic Disruptions”

Now that the US is recovering from the pandemic, demand has outstripped supply in some parts of the economy, resulting in inflation. This shouldn’t be a surprise. Something else that shouldn’t be a surprise is that Republicans blame Biden, as if any of them would do better.

The economist Paul Krugman summarizes the situation in his newsletter

It’s been a troubled few months on the economic front. Inflation has soared to a 28-year high. Supermarket shelves are bare, and gas stations closed. Good luck if you’re having problems with your home heating system: Replacing your boiler, which normally takes 48 hours, now takes two or three months. President Biden really is messing up, isn’t he?

Oh, wait. That inflation record was set not in America but in Germany. Stories about food and gasoline shortages are coming from Britain. The boiler replacement crisis seems to be hitting France especially hard.

And one major driver of recent inflation, in America and everywhere else, has been a spike in energy prices — prices that are set in world markets, on which any one country, even the United States, has limited influence. D____ T____ has been claiming that if he were president, gas would be below $2 a gallon [in fact, America would be an earthly paradise, just like when he left office]. How exactly does he imagine he could achieve that, when oil is traded globally and America accounts for only about a fifth of the world’s oil consumption? [Answer: he doesn’t imagine how he’d achieve it, but he thinks doing it would make him look good, and that’s enough reason to say he’d do it].

In other words, the problems that have been crimping recovery from the pandemic recession seem, by and large, to be global rather than local. That’s not to say that national policies are playing no role. For example, Britain’s woes are partly the result of a shortage of truck drivers, which in turn has a lot to do with the exodus of foreign workers after Brexit. But the fact that everyone seems to be having similar problems tells us that policy is playing less of a role than many people seem to think. And it does raise the question of what, if anything, the United States should be doing differently. . . .

Many observers have been drawing parallels with the stagflation of the 1970s. But so far, at least, what we’re experiencing doesn’t look much like that. Most economies have been growing, not shrinking; unemployment has been falling, not rising. While there have been some supply disruptions — Chinese ports have suffered closures as a result of Covid outbreaks, in March a fire at a Japanese factory that supplies many of the semiconductor chips used in cars around the world hit auto production, and so on — these disruptions aren’t the main story.

Probably the best parallel is not with 1974 or 1979 but with the Korean War, when inflation spiked, hitting almost 10 percent at an annual rate, because supply couldn’t keep up with surging demand.

Is demand really all that high? Real final sales (purchases for consumption or investment) in the United States hit a record high but are roughly back to the prepandemic trend. However, the composition of demand has changed. During the worst of the pandemic, people were unable or unwilling to consume services like restaurant meals, and they compensated by buying more stuff — consumer durables like cars, household appliances and electronics. At their peak, purchases of durable goods were an astonishing 34 percent above prepandemic levels; they’ve come down some but are still very high. Something similar seems to have happened around the world.

Meanwhile, supply has been constrained not just by clogged ports and chip shortages but also by the Great Resignation, the apparent reluctance of many workers to return to their old jobs. Like inflation and shortages of goods, this is an international phenomenon. Reports from Britain, in particular, sound remarkably like those from the United States: Large numbers of workers, especially older workers, appear to have chosen to stay at home and perhaps retire early after having been forced off their jobs by Covid-19.

. . . What could or should U.S. policymakers be doing differently? As I’ve already suggested, energy prices are largely out of U.S. control.

A few months ago, there were widespread claims that enhanced unemployment benefits were discouraging workers from accepting jobs. Many states rushed to cancel these benefits even before they expired at a national level in early September. But there has been no visible positive effect on labor supply.

Should current shortages inspire caution about Democratic spending plans? No. At this point, the Build Back Better agenda, if it happens at all, will amount to only about 0.6 percent of G.D.P. over the next decade, largely paid for by tax increases. It won’t be a significant inflationary force . . .

Other things might help. I’ve argued in the past that vaccine mandates, by making Americans feel safer about going to work and buying services rather than goods, could play a role in unclogging supply chains.

What’s left? If inflation really starts to look as if it’s getting embedded in the economy, the Federal Reserve should head it off by tightening policy, eventually by raising interest rates. . .

The most important point, however, may be not to overreact to current events. The fact that shortages and inflation are happening around the world is actually an indication that national policies aren’t the main cause of the problems. They are, instead, largely inevitable as economies try to restart after the epic disruptions caused by Covid-19. It will take time to sort things out — more time than most people, myself included, expected. . . .

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