Post-Pandemic Sources of Inflation Dynamics in USA and Europe

Lukáš ŠTIEBER

https://doi.org/10.53465/EDAMBA.2022.9788022550420.462-469

 

Abstract: In the context of so-called Great Moderation of the last decades characterized by relatively low and stable inflation rates are the post-pandemic inflation rates of late 2021 and early 2022 relatively elevated. Economic theory and intuition points to the set of inflation dynamic drivers of the real and possibly monetary character. The high inflation rates have negative economic and social consequences; however, the sources of inflation dynamic determine the adequate monetary policies. The goal of this paper is to analyze theoretically sources of inflation dynamics as the set of real and monetary variables It seems that on the real side are inflation drivers in USA and Europe of similar nature, on the contrary on the monetary side. The crucial distinction between the inflation dynamics caused by monetary factors in USA and Europe is the extent of QE program and the transmission of the program. Therefore, we conclude that it is plausible, that post-pandemic inflation dynamic in Europe is mainly driven by raising energy and food prices, whereas in USA also with fiscal over-expansion, however more rigorous analysis is needed to take stated conclusion as factual.

Keywords: inflation, transmission of monetary policy, monetary policy

JEL classification: C51, E31, E47

Fulltext: PDF

Online publication date: 3 March 2023

ISBN: 978-80-225-5042-0

Publisher: University of Economics in Bratislava

Pages: 462-469

 

To cite this proceedings paper (STN ISO 690 and 690-2):

ŠTIEBER, L. 2023. Post-pandemic sources of inflation dynamics in USA and Europe. In LÜLEYOVÁ, A. (ed.). EDAMBA 2022: Conference Proceedings. Bratislava: University of Economics in Bratislava, 2023. ISBN 978-80-225-5042-0, pp. 462-469. https://doi.org/10.53465/EDAMBA.2022.9788022550420.462-469