Pandemic-Era Inflation Drivers and Global Spillovers

Julian di Giovanni, Kalemli-Özcan, Á¹¢ebnem, Álvaro Silva and Yıldırım, Muhammed A.

No 18628, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We employ a multi-country multi-sector New Keynesian model to analyze the factors driving pandemic-era inflation. The model incorporates both sector-specific and aggregate shocks, which propagate through the global trade and production network and generate demand and supply imbalances, leading to inflation and spillovers. The baseline quantitative exercise matches changes in aggregate and sectoral prices and wages for a sample of countries including the United States, Euro Area, China, and Russia. Our findings indicate that supply-chain bottlenecks ignited inflation in 2020, followed by a surge in prices driven by aggregate demand shocks from 2021 through 2022, exacerbated by rising energy prices.

Keywords: Inflation; Global production network; International spillovers (search for similar items in EconPapers)
JEL-codes: E2 E3 E6 F1 F4 (search for similar items in EconPapers)
Date: 2023-11
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Related works:
Working Paper: Pandemic-Era Inflation Drivers and Global Spillovers (2023)
Working Paper: Pandemic-era Inflation Drivers and Global Spillovers (2023)
Working Paper: Pandemic-Era Inflation Drivers and Global Spillovers (2023)
Working Paper: Pandemic-era Inflation Drivers and Global Spillovers (2023)
Working Paper: Pandemic-Era Inflation Drivers and Global Spillovers (2023)
Working Paper: Pandemic-era Inflation Drivers and Global Spillovers (2023)
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