Shifts & Narratives #2 - Inflation: something deep awakens

Monday 26 April 2021

One year ago, as the Covid-19 crisis had just begun, we wrote about its potential inflation implications from both a cyclical and a structural standpoint. Cyclically, the crisis was already generating a combination of demand and supply shocks that could only increase short-term inflation volatility and sectoral fragmentation. Structurally, we saw its potential to accelerate policy and institutional changes that, adding to pre-existing factors, could at some point question the continuation of the 40-yearold ‘Volcker’ disinflationary trend, although the case was very open at that time...

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