Does money growth help explain the recent inflation surge?
Claudio Borio,
Boris Hofmann and
Egon Zakrajšek ()
No 67, BIS Bulletins from Bank for International Settlements
Abstract:
The strength of the link between money growth and inflation depends on the inflation regime: it is one-to-one when inflation is high and virtually non-existent when it is low. A link can also be seen in the recent possible transition from a low- to a high-inflation regime. An upsurge in money growth preceded the inflation flare-up, and countries with stronger money growth saw markedly higher inflation. Looking at money growth would have helped to improve post-pandemic inflation forecasts, suggesting that its information value may have been neglected.
Pages: 9 pages
Date: 2023-01-26
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Persistent link: https://EconPapers.repec.org/RePEc:bis:bisblt:67
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