2023/Q4 Article 01. The post-pandemic inflationary episode in advanced economies: a historical perspective
Series: Economic Bulletin.
Author: Corinna Ghirelli, Teresa Sastre, Nicolás Bonino, Luis Julián Álvarez and Daniel Santabárbara.
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Summary
Rationale
Inflation surged in the world economy from 2021 owing to a succession of shocks, including most notably the rise in energy prices. However, it appears to have peaked in many countries over the past few months, marking the start of a declining phase. This article analyses, for a group of advanced economies, the features of the current inflationary process vis-à-vis other past episodes, paying special attention to those triggered by energy shocks.
Takeaways
- The post-pandemic surge in inflation has occurred faster than in previous inflationary periods. However, the scale of the rising inflation in the current episode is similar to that of past episodes arising from energy price increases.
- According to the historical pattern, underlying inflation reaches its peak very near the time headline inflation does. However, in the current inflationary process there is a lag of around six months and underlying inflation is more persistent.
- The synchronisation between countries regarding inflation is greater in inflationary processes caused by energy price shocks and is stronger in the current episode than in the past owing to the confluence of several global shocks.