What global factors could make inflation less stable?

Most advanced economies enjoyed a long period of low, stable inflation prior to 2021, with inflation in the U.S. actually running below the Federal Reserve’s 2% inflation target for much of the 2010s. This stability was driven in part by factors external to monetary policy, including downward price and wage pressures from globalization and de-unionization. However, the authors of a new BPEA paper, “Changing central bank pressures and inflation,” argue that emerging trends may present headwinds to central banks trying to keep inflation steady. On this episode of the Brookings Podcast on Economic Activity, paper co-author Pierre Yared of Columbia Business School speaks with Brookings Senior Fellow Don Kohn about the new research and its implications for policymakers.
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