The euro area pandemic inflation: A tale of supply chains, household inflation expectations, and firm pricing power

Viral Acharya, Matteo Crosignani, Tim Eisert, Christian Eufinger

After a disinflationary period that spanned over two decades prior to the pandemic, countries in the euro area suddenly faced rising inflation in 2021. This column discusses how this post-pandemic inflationary episode, initially confined to products affected by supply-chain bottlenecks, generalised into a broad-based and persistent phenomenon. The findings indicate that household inflation expectations and firms’ pricing power played a key role in this propagation.

Πηγή: Voxeu

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