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Olsen: The risk of inflation is real — and growing

March 22, 2021
One dollar bill by the wall

President Biden hopes his $1.9 trillion stimulus act has Americans repeating a word they’ve longed to speak for more than a year: recovery. It could also have them saying one they haven’t said in a long time: inflation. Inflation is normally a result of too much money chasing too few goods. That’s not to say that price increases cannot result from other causes. Rising energy prices, for example, are often the result of sudden changes in supply, as happened when the Arab oil embargo began in 1973. That’s one reason central banks often look at what they call “core inflation,” which strips out price levels for volatile sectors such as food and energy to assess whether an economy is suffering from sustained inflation.

Article Source: Washington Post

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