Anatomy of a Global Inflation Surge: A Systematic Review of Its Drivers and Consequences

This study presents a systematic literature review that synthesizes contemporary research on the drivers, impacts, and policy responses to recent global inflationary trends. Amid vigorous debate over the persistence of current price pressures, this study analyzes the complex interplay of demand-pull effects, cost-push shocks, and expansive monetary policy that characterizes the modern inflationary landscape. By systematically evaluating empirical research from high-impact, peer-reviewed journals, the review examines the methodologies, data, and key variables employed in the economic literature to measure and analyze inflation. The synthesis reveals a broad consensus on the critical role of credible monetary policy, particularly inflation-targeting (IT) frameworks, in anchoring expectations and stabilizing economies. These frameworks are shown to effectively manage the propagation of shocks and create a predictable environment for investment. However, the findings underscore that policy effectiveness is highly context-dependent, with institutional quality and structural vulnerabilities having a significant influence on outcomes, especially in emerging markets. The study concludes that managing inflation requires a holistic and integrated strategy. Adequate price stability necessitates coordinating credible monetary policy with prudent fiscal management and structural reforms to mitigate supply-side constraints.