Focus on Arts and Ecology

An international comparison shows that rising inflation is a global phenomenon, not unique to the United States. This means that high inflation in the U.S.—which is showing signs of easing in the July report released earlier this week—has not been driven by any American policy—not the American Rescue Plan or other generous fiscal relief during the pandemic recession and recovery, nor any other U.S. economic policy.

In the chart below, we focus on core inflation (stripping out the prices of energy and food) because that is widely considered a better target for basing decisions about macroeconomic stabilization. 

As the chart below shows, all but one Organisation for Economic Co-operation and Development (OECD) country saw an acceleration in core inflation.

Some have argued that the global rise of inflation means that many countries—including the U.S.—overstimulated their economies and generated excess aggregate demand. But this explanation is not supported by the data. The countries with larger declines in unemployment over the past 18 months have not seen larger inflation spikes.

In any case, the available data indicate that policies to either restrict recovery spending or deliberately slow economic growth would be misguided at best.

<Name>, EPI presents sound data in full context in our analysis of economic problems. Please help us spread the word by sharing this chart with your networks and, if you are able, please consider making a gift to support EPI’s important work.

Thank you for your support and for helping EPI by sharing our research and resources with your network. We appreciate everything you do for our collective movement. 
 
EPI Staff
Economic Policy Institute