Today’s inflation and the Great Inflation of the 1970s: Similarities and differences

  The recent commodity price surge, in the wake of Russia’s invasion of Ukraine, has exacerbated already elevated inflationary pressures. ISI MA Economics entrance coaching  argues that over the medium term, as recent shocks unwind, inflation is expected to ease back towards targets, but the Great Inflation of the 1970s is a reminder of the material risks to this outlook. As inflation remains elevated, the risk is growing that, to bring inflation back to target, advanced economy central banks will once again need to undertake a much more forceful policy response than currently anticipated.  Global inflation has risen over the past year from less than 2% to over 6%, the highest level since 2008 . Inflation is now running well above central bank inflation targets in almost all advanced economies and most inflation-targeting emerging market and developing economies. The recent commodity price surge triggered by Russia’s invasion of Ukraine will raise inflation further in ...