Opinion
Micro-pricing a big puzzle in inflation’s persistence
The real world of price setting doesn’t look much like the supply and demand schedules of Economics 101.
Stephen GrenvilleFormer central bankerInflation in the post-COVID period has surprised forecasters worldwide. When the dust settles, postmortems should improve our understanding of the inflationary process. Allan Fels has agreed to chair the ACTU’s price-gouging inquiry.
At the macro level, economists will reassess the roles of demand, supply, policy settings and the factors which can give inflation ongoing persistence – mainly expectations about future inflation.
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