An international perspective on inflation during the COVID-19 recovery

Abstract

This chapter examines the global inflation surge that accompanied the recovery from the COVID-19 pandemic, emphasizing the role of international factors. It attributes the inflation primarily to a global scarcity of tradable goods, driven by supply chain disruptions and increased demand for manufactured goods. The chapter introduces a conceptual framework to understand the international transmission of inflation and explores the spillovers from monetary interventions by central banks worldwide. It also discusses the potential benefits of international monetary policy cooperation. Additionally, the chapter provides a historical perspective by comparing the post-pandemic inflation with past inflationary episodes, such as the high inflation of the 1970s and periods of global deflation following the Great Depression and the 2008 financial crisis.