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Sectoral price dynamics in the last mile of post-Covid-19 disinflation

Author

Listed:
  • Pongpitch Amatyakul
  • Deniz Igan
  • Marco Jacopo Lombardi

Abstract

The drivers of the Covid-19 inflation surge have evolved as demand has shifted, first from services to goods and then back from goods to services. We document the sectoral price growth patterns since the surge and discuss what the composition of inflation implies for the outlook. We find that the contribution of services has increased and has been slower to retreat than that of goods excluding food and energy ("core goods"). This could imply slower disinflation ahead, especially given the relative stickiness of services prices and past relative price trends. We then discuss the implications for monetary policy.

Suggested Citation

  • Pongpitch Amatyakul & Deniz Igan & Marco Jacopo Lombardi, 2024. "Sectoral price dynamics in the last mile of post-Covid-19 disinflation," BIS Quarterly Review, Bank for International Settlements, March.
    • Handle: RePEc:bis:bisqtr:2403d
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    References listed on IDEAS

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    Cited by:

    1. Nickel, Christiane & Kilponen, Juha & Moral-Benito, Enrique & Koester, Gerrit & Ciccarelli, Matteo & Enders, Almira & Holton, Sarah & Landau, Bettina & Venditti, Fabrizio & Bobeica, Elena & Brand, Cla, 2025. "A strategic view on the economic and inflation environment in the euro area," Occasional Paper Series 371, European Central Bank.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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