Inflation in the wake of coronavirus and war [What Think Tanks are thinking]

Inflation has reached the highest level in decades in the European Union, United States and many other countries, with the Ukraine conflict adding upward pressure on prices of energy and food. The Russian invasion has intensified the already near-record growth of consumer prices resulting from the coronavirus pandemic and broken supply-chains. The war has sharply curbed supply of energy, wheat and other products from Russia and Ukraine, their major producers. The countries' exports look set to dwindle further if the war continues and the EU imposes a ban on its massive gas and oil imports from Russia, adding to the already strict sanctions on Moscow. Some central banks have signalled that they will further increase interest rates, and 'stagflation', or high inflation coupled with economic stagnation, could follow. Before the invasion, many experts had expected rapid price growth to be temporary. Now, they believe inflation could become more entrenched, further squeezing households' real income in coming months. This note gathers links to the recent publications and commentaries from many international think tanks on resurgent inflation. Analyses on the war and its implications can be found in a previous edition of the 'What Think Tanks are Thinking' series.