Inflation: More Than Transitory Because of Pandemic Policies

A customer counts his cash at the checkout lane of a Walmart store in Los Angeles, Calif., in 2013. (Kevork Djansezian/Reuters)
Policy-makers don't talk about the trade-offs involved in stimulus policies.

NRPLUS MEMBER ARTICLE M any people have become aware of the sharp increase in many prices during the pandemic. Housing prices took off soon after the pandemic began, followed quickly by auto prices due to a shortage of semiconductor chips. By late 2020, many commodity prices were surging. Since then, price pressures have become widespread as a result of worsening backlogs in the global supply chain and labor shortages that are raising worker compensation. After first insisting that higher prices were a transitory phenomenon, Federal Reserve chairman Jerome Powell admits that “supply-side constraints have gotten worse. The risks are clearly now to longer and

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Philip Cross is a senior fellow at the Macdonald-Laurier Institute and author of An Entrepreneurial Canada? Understanding Canada’s Chronic Lack of Innovation and How We Can Fix It.


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