Untangling Persistent Inflation: Understanding the Factors at Work

Abstract: While recent inflation numbers have been encouraging, persistent inflationary pressures remain a topic of concern and policy deliberation. This article delves into some candidate drivers of inflation persistence and their implications for monetary policy. In particular, we explore factors contributing to the persistence of inflation, such as intrinsic persistence, complementarities, indexation, unanchoring of expectations, fiscal policy and other persistent inflationary shocks.

Keywords: Inflation; intrinsic inflation persistence; complementarity; Fiscal Policy;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2023-09

Volume: 23

Issue: 31