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First Quadrant Insights: Inflation And Monetary Policy Fitting The Cure To The Disease
August 2021 - Hedge Fund
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Inflation has been on everyone’s mind these days. But inflation remains one of those unusual phenomena that we observe regularly without fully understanding its cause. We can see how muddled market pundits and politicians can be about it. Some say that it is caused by shortages in materials and/or labor. Others say that it comes from excess demand being unleashed as pandemic restrictions are being eased. Still others blame easy money policy or excessive government spending. So which is it? And why can’t we agree on its cause?
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