What Drives U.S. Import Price Inflation?
Inflation has risen sharply in many countries since the COVID-19 outbreak. Economists have debated the underlying causes. In this paper, we examine the drivers of the global import price inflation, which peaked at approximately 11 percent a year. We find that a common global component closely tracks movements in aggregate U.S. import prices until late 2022. Afterward, idiosyncratic U.S. demand shocks started to dominate.
Non-Technical Summaries
- Increases in the prices of imported goods contributed to the overall rise in the US inflation rate during the COVID-19 pandemic. Mary Amiti...
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