The Politics of Inflation

Inflation returned to the foreground of political economies worldwide after 2019, after 30 years of relative quiescence. Inflation remains unpopular—including among those who are hurt by the policies currently used to reduce it—and damaging for established regimes and incumbent governments. But whether the explanations and tools developed to contain price increases after the 1970s are appropriate for twenty-first century inflation is less clear. Credibly independent conservative monetary policy, export-oriented production, and wage coordination helped limit demand-driven and wage-push inflation in the past, but global supply shocks and structures and sellers’ inflation may be more important drivers of contemporary inflation. These are yet to be systematically examined in political science, and their political consequences and policy solutions look quite different.