Sectoral price dynamics in the last mile of post-Covid-19 disinflation

Pongpitch Amatyakul, Deniz Igan and Marco Lombardi

BIS Quarterly Review, 2024

Abstract: The drivers of the Covid-19 inflation surge have evolved as demand has shifted, first from services to goods and then back from goods to services. We document the sectoral price growth patterns since the surge and discuss what the composition of inflation implies for the outlook. We find that the contribution of services has increased and has been slower to retreat than that of goods excluding food and energy ("core goods"). This could imply slower disinflation ahead, especially given the relative stickiness of services prices and past relative price trends. We then discuss the implications for monetary policy.

JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2024
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