Inflation rose sharply in 2021 due to several supply shocks. Although there is a clear downward trend. However, the supply shocks could also have a structural effect on inflation. A look at the Phillips curve model can shed light on this.
The US Federal Reserve is turning the interest rate screw hard and accelerating the exit from its ultra-expansive monetary policy. Will it get a grip on high inflation? And how will the economy cope with higher interest rates?
