How did we miss the surge in inflation? IMF researchers think they know

We’re at that point in the economic cycle where officials are comfortable to admit they’ve made mistakes.

Central bankers are happy to talk about their forecast errors.

And the International Monetary Fund is publishing work that explains why it failed to predict the surge in inflation in recent years.

What can we learn from it?

A debate that’s getting ugly

It’s been obvious to anyone watching that economists are having a spirited debate about inflation at the moment.

They’ve been arguing about its origins, how it’s spread through economies, who it’s impacting the most, and how long it could take to retreat.

But the debate has been getting nasty in some corners too, especially over the question of profits.

Have any companies been using the cover of inflation to make excess profits? Has extreme profit-taking contributed to any inflationary dynamics?

Source link