Why Is U.S. Inflation Higher than in Other Countries?

Jordà, Òscar; Liu, Celeste; Nechio, Fernanda; Rivera-Reyes, Fabián

Journal Article

Why Is U.S. Inflation Higher than in Other Countries?

Abstract: Inflation rates in the United States and other developed economies have closely tracked each other historically. Problems with global supply chains and changes in spending patterns due to the COVID-19 pandemic have pushed up inflation worldwide. However, since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries. Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021.