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What Caused the US Pandemic-Era Inflation?

Ben Bernanke & Olivier Blanchard

American Economic Journal: Macroeconomics2025https://doi.org/10.1257/mac.20230195article
AJG 4ABDC A*
Weight
0.64

Abstract

We estimate a simple dynamic model of prices, wages, and short-run and long-run inflation expectations that allows us to analyze and quantify the sources of recent US inflation. We find that, contrary to early concerns that inflation would be spurred by overheated labor markets, most of the inflation surge resulted from shocks to prices given wages. Although tight labor markets have, thus far, not been the primary driver of inflation, we find that they have a relatively more persistent effect on wage growth and inflation. Controlling inflation will, thus, ultimately require achieving a better balance of labor demand and supply. (JEL E12, E24, E31, E62, I12)

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https://doi.org/https://doi.org/10.1257/mac.20230195

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@article{ben2025,
  title        = {{What Caused the US Pandemic-Era Inflation?}},
  author       = {Ben Bernanke & Olivier Blanchard},
  journal      = {American Economic Journal: Macroeconomics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1257/mac.20230195},
}

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What Caused the US Pandemic-Era Inflation?

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Evidence weight

0.64

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.67 × 0.4 = 0.27
M · momentum0.95 × 0.15 = 0.14
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.