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Relative Price Changes Are Unlikely to Account for Recent High Inflation

Author

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  • Alexander L. Wolman

Abstract

March 2021 marked the first month of the ongoing high inflation episode in the U.S. Last September, I analyzed the first five months of this episode through the lens of the distribution of price changes for all PCE components. A small fraction of expenditures accounted for much of the high inflation in those months. In this Economic Brief, I provide a related analysis and incorporate a new summary statistic for the distribution of relative price changes. In the last four months, high inflation has not been concentrated in a small fraction of expenditures, deviating from the relationship we had largely seen in post-1994 data.

Suggested Citation

  • Alexander L. Wolman, 2022. "Relative Price Changes Are Unlikely to Account for Recent High Inflation," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 22(10), March.
    • Handle: RePEc:fip:fedreb:93899
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    File URL: https://www.richmondfed.org/publications/research/economic_brief/2022/eb_22-10
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    Cited by:

    1. Francisco J. Ruge-Murcia & Alexander L. Wolman, 2022. "Relative Price Shocks and Inflation," Working Paper 22-07, Federal Reserve Bank of Richmond.

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    Keywords

    PCE; inflation;

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