Are changes in inflation being driven by transitory shocks that will die out quickly? Or by persistent shocks that will cause structural change within the economy? An example of a transitory shock is the supply chain bottlenecks that occurred during and shortly after the Covid pandemic. (Remember the ship that got hung up in the Suez Canal, causing a huge traffic jam?) An example of a persistent shock is the 1973 oil crisis and related geopolitical conflicts in the Middle East. Economists want to pinpoint what kind of inflationary pressure is currently brewing so that the national treasury—in the U.S., […]