IDEAS home Printed from https://ideas.repec.org/a/fip/fedfel/101139.html
   My bibliography  Save this article

Is Demand or Supply More Important for Inflation?

Author

Listed:
  • Kevin J. Lansing

Abstract

Simulations using a Phillips curve-type relationship provide insights into the importance of demand versus supply for inflation over different periods. The decade of low inflation after the Great Recession was driven mainly by supply forces. Given that monetary policy operates to influence demand but not supply, this result helps to account for the persistent undershooting of the Fed’s 2% inflation goal during these years. In contrast, the period of high inflation during the pandemic era was driven mainly by demand forces.

Suggested Citation

  • Kevin J. Lansing, 2025. "Is Demand or Supply More Important for Inflation?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2025(14), pages 1-6, June.
    • Handle: RePEc:fip:fedfel:101139
    as

    Download full text from publisher

    File URL: https://www.frbsf.org/wp-content/uploads/el2025-14.pdf
    File Function: Full text - article PDF
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfel:101139. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.