Four Theories Regarding Inflation
5 min readNov 16, 2021
There’s a lot of talk about inflation happening right now. Are we experiencing transitional inflation, severe inflation, stagflation, or no inflation? I’ll walk through four theories around inflation from policymakers, economists, and investors below.
1. Inflation is Transitory (Demand Side Perspective)
- This is the position of the Federal Reserve (vis a vis Jerome Powell). Their argument goes that the country went through a deflationary cycle due to the COVID19 lockdowns and growth will spike and “run hot” due to historic stimulus, low interest…