Lessons for the central banks: Inflation in 2021-2023

O. Shibanov
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O. Shibanov: New Economic School (NES), Program "Master of Arts in Finance", Moscow, Russia

Journal of the New Economic Association, 2024, vol. 62, issue 1, 240-245

Abstract: The world inflation in 2021-2023 was unexpectedly high - and that was the most serious global inflation episode after the oil shock of 1970th. The response of the Central banks (CB) was to increase interest rates, and by the end of 2023 inflation has hampered. Yet CBs had to accept that they made a number of errors - namely, too late start of the rate rising (in the US and EU - from the Spring of 2022), inaccurate inflation modelling, and too strong expectations of possible recession. I show how the literature thinks about the contribution of supply and demand factors into inflation in the US, EU and Russia. The speed of CB reaction to higher price increase is estimated, several steps for the CBs are valuated. The main ones - use more distinct models, react fast to the inflation processes, and do not ignore historic data that might seem outdated.

Keywords: E00; E31; E52; E58 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2024:i:62:p:240-245

DOI: 10.31737/22212264_2024_1_240-245

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