ifo Schnelldienst 09/2021: Is the Great Inflation Looming After Corona?

Consumer Congestion, Higher Energy Prices, Loose Monetary Policy: Is Massive Inflation Looming After Covid-19?

Inflation was not an issue to worry about for a long time. In Germany and other advanced economies, inflation has tended to fall rather than rise in recent decades. Since the beginning of this year, however, inflation in Germany has accelerated sharply. In August 2021, the inflation rate reached a level that was 3.9 percent above the corresponding level in the same month of the previous year. What factors have influenced this current development? Is inflation returning, in the sense of a sustained and broad-based stronger rise in prices?

With contributions from:

• Markus Demary, One-off Effects Determine Inflation
• Timo Wollmershäuser, Base Effects Drive Up Inflation
• Gerit Vogt, Will Higher Inflation Rates Be Permanent or Only Temporary?
• Gertud R. Traud and Stefan Mütze, Permanently Higher Inflation in the Euro Area
• Thomas Mayer, In the Long Run, Inflation Is Always a Monetary Phenomenon
• Pascal Seiler, Effects of the Pandemic on Inflation Measurement
• Lukas Haffert, Nils Redeker, and Tobias Rommel, Fear of Inflation? On the Political Power of Deceptive Memories