For the past decade, inflation hasn’t behaved the way economic models predicted. The inflation rate didn’t fall as much during the Great Recession as expected, and it hasn’t climbed as much as expected as the economy and labor market recovered. An earlier generation of central bankers struggled to bring inflation down. Today, the Federal Reserve and other major central banks are struggling to bring inflation up to their publicly announced targets. Experts are debating if the global economy has changed in profound ways, or if inflation is simply sleeping and will awaken sometime.
On October 3, the Hutchins Center on Fiscal & Monetary Policy at Brookings explored the various explanations for the unusual behavior of inflation and the implications for monetary and other policy, with several experts.