- When people debate whether inflation is caused by supply or demand factors, they are actually debating what sort of monetary policy would have been appropriate over the past 2 years.
- To a hard-core inflation hawk that favors a policy of 2% inflation come hell or high water, all excessive inflation is demand-driven, by definition.
- If 5.5% NGDP growth is the baseline, then nominal spending growth since late 2019 has been roughly appropriate, and all of the current high inflation is supply-driven.
For further details see:
How Much Of The Inflation Is Excessive?