Liberty Street Economics: Drivers of Inflation: The New York Fed DSGE Model’s Perspective

F E D E R A L   R E S E R V E   B A N K   o f   N E W  Y O R K LIBERTY STREET ECONOMICS   Drivers of Inflation: The New York Fed DSGE Model's Perspective   Marco Del Negro, Aidan Gleich, Shlok Goyal, Alissa Johnson, and Andrea Tambalotti   After a sharp decline in the first few months of the COVID-19 pandemic, inflation rebounded in the second half of 2020 and surged throughout 2021. This post analyzes the drivers of these developments through the lens of the New York Fed DSGE model. Its main finding is that the recent rise in inflation is mostly accounted for by a large cost-push shock that occurred in the second quarter of 2021 and whose inflationary effects persist today.   READ MORE

 

 

 

 

 

 

 

 

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