IS HIGH INFLATION THE NEW NORMAL?
Reason magazine|April 2022
ECONOMICS
ALEXANDER WILLIAM SALTER
IS HIGH INFLATION THE NEW NORMAL?

DURING THE SECOND half of 2021, economists debated whether inflation in the U.S. would be “permanent” or “transitory.” Inflation hawks argued that massive fiscal and monetary stimulus was the obvious cause of price hikes. Inflation doves replied that rising prices were primarily due to pandemic-related supply chain disruptions. In early December, the debate suddenly shifted: Federal Reserve Chairman Jerome Powell told legislators, “it’s probably time to retire that word”—transitory—and the hawks took a victory lap.

It is easy to see why Powell was concerned. With inflation running at 7 percent, we are experiencing the strongest price pressures in nearly 40 years. But inflation is tough to fully explain and even harder to predict.

Partisans in the inflation battle frequently fail to acknowledge that their stories are not mutually exclusive. If public policy boosts demand while production bottlenecks hamper supply, there is no question about what happens to prices— up they go. Digging further into the debate provides additional reasons to eschew confident assertions.

This story is from the April 2022 edition of Reason magazine.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the April 2022 edition of Reason magazine.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM REASON MAGAZINEView All
THE LIBERTARIAN MIND OF DAVID BOAZ
Reason magazine

THE LIBERTARIAN MIND OF DAVID BOAZ

Threats to freedom, Trump vs. Biden, and the wins libertarians can’t seem to acknowledge

time-read
10+ mins  |
May 2024
DARE TO Fail
Reason magazine

DARE TO Fail

THERE’S NO SUCH thing as a universal millennial experience, but DARE comes close.

time-read
5 mins  |
May 2024
CULTURE WARRIOR IN CHIEF
Reason magazine

CULTURE WARRIOR IN CHIEF

THE MODERN PRESIDENCY IS A DIVIDER, NOT A UNITER. IT HAS BECOME FAR TOO POWERFUL TO BE ANYTHING ELSE.

time-read
10+ mins  |
May 2024
Progress, Rediscovered
Reason magazine

Progress, Rediscovered

A NEW MOVEMENT PROMOTING SCIENTIFIC, TECHNOLOGICAL, AND ECONOMIC SOLUTIONS TO HUMANITY’S PROBLEMS EMERGES.

time-read
10+ mins  |
May 2024
'Smoking Opium Is Not Our Vice'
Reason magazine

'Smoking Opium Is Not Our Vice'

AMERICA’S FIRST DRUG WAR WAS DRIVEN BY XENOPHOBIA AGAINST CHINESE MIGRANTS.

time-read
10+ mins  |
May 2024
HOW CAPITALISM BEAT COMMUNISM IN VIETNAM
Reason magazine

HOW CAPITALISM BEAT COMMUNISM IN VIETNAM

IT ONLY TOOK A GENERATION TO GO FROM RATION CARDS TO EXPORTING ELECTRONICS.

time-read
10+ mins  |
May 2024
50 Years of D&D: You Can't Copyright Fun
Reason magazine

50 Years of D&D: You Can't Copyright Fun

THIS YEAR MARKS the 50th anniversary of the original edition of Dungeons & Dragons (D&D), the granddaddy of tabletop role-playing games and one of the urtexts of nerd culture.

time-read
4 mins  |
May 2024
The Pupil Panopticon
Reason magazine

The Pupil Panopticon

BIG BROTHER—and Parent, and Teacher— are watching.

time-read
5 mins  |
May 2024
Congress Could Swipe Your Credit Reward Points
Reason magazine

Congress Could Swipe Your Credit Reward Points

A PLOT TO kill credit card reward points has bipartisan buy-in, with lawmakers framing the effort as an attempt to curb stillstubborn inflation.

time-read
2 mins  |
May 2024
Regulators Killed a Lifeline for Roombas
Reason magazine

Regulators Killed a Lifeline for Roombas

IN JANUARY 2024, Amazon terminated its agreement to acquire iRobot, the company that manufactures the Roomba robot vacuum.

time-read
2 mins  |
May 2024