Does cash progress assist clarify the latest inflation surge?
Claudio Borio, Boris Hofmann and Egon Zakrajšek in this BIS Bulletin article:
- The energy of the hyperlink between cash progress and inflation is determined by the inflation regime: it’s one-to-one when inflation is excessive and just about non-existent when it’s low.
- A hyperlink can be seen within the latest potential transition from a low- to a high-inflation regime. An upsurge in cash progress preceded the inflation flare-up, and nations with stronger cash progress noticed markedly larger inflation.
- cash progress would have helped to enhance post-pandemic inflation forecasts, suggesting that its info worth might have been uncared for.
Will financial aggregates make a comeback?
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