For the last two years, inflation has been high, well above the Federal Reserve’s 2% annual target. High inflation has been persistent and widespread—the result of both supply and demand factors associated with the COVID-19 pandemic, including the fiscal and monetary policies that were implemented in response.1 This post is the first in a two-part series that will analyze the behavior of inflation and the impact of fiscal and monetary policies during this episode, and provide a plausible outlook for the near future. Aggregate Prices and Inflation Inflation is the change in the price level over a period of time. The ... (full story)