In short:

🔹 Post-pandemic inflation was largely an endogenous response of commodity prices to macro developments, not driven by supply shocks.

🔹 Commodity costs are a crucial—but often ignored—link between macro conditions and inflation.

📄 Full paper: users.ugent.be/~gpeersma/ge...

In other words: labor markets and output gaps may not have been overheated within individual countries, but with many economies hitting full capacity at once, the bottleneck shifted to global commodity markets — fueling worldwide inflation

Why the disconnect? 🧐

Because demand shocks did matter — but their inflationary impact didn’t flow through the usual “Phillips Curve” channels like the output gap or labor market tightness. It was transmitted elsewhere.

The results also help reconcile seemingly divergent existing findings

🔹 VAR-based studies (e.g. @DomenicoGiannon & @gprimice) attribute the inflation surge mainly to demand shocks

🔹 Phillips Curve studies (e.g. Bernanke & @ojblanchard1) find little evidence for that view

➡️I show that standard Phillips Curve estimates are indeed severely biased when commodity market dynamics are ignored.

➡️When I account for endogeneity by instrumenting commodity prices with exogenous shocks from the SVAR, the Phillips Curve steepens markedly.

Standard Phillips Curves usually rely on measures of slack—like the output gap or labor market tightness—to proxy firms’ marginal costs, but overlook commodity input costs.

This omission can bias the estimates. 👇

More broadly, the results highlight that commodity costs are a key transmission channel through which macroeconomic conditions affect inflation.

This channel is typically ignored in standard Phillips Curve estimations...

🚨Instead, most of the post-pandemic surge and decline in global commodity prices (and inflation more broadly) was an endogenous (demand-driven) response to macroeconomic forces:
➡️ global business cycle
➡️ fiscal policy
➡️ (especially) monetary policy

🚨However, only a small part of the surge in global energy and food prices was due to exogenous (supply-driven) shocks.
As a result, exogenous shocks—like the Russian invasion of Ukraine—had also only a modest effect on overall inflation. 👇

A first key finding: the average historical pass-through of energy and food commodity costs can almost fully account for the post-pandemic rise and fall of energy, food, and core CPI inflation in the US and euro area. 👇

Is per huishouden. Zitten ook veel alleenstaanden in (5,2 miljoen huishoudens in totaal)

Zij kunnen toch evengoed de marginale koper zijn?

Als rendement op obligaties/aandelen door belastingen naar 2,5% daalt, dan zijn investeerders bereid om tot €200 te betalen voor exact hetzelfde verhuurpand (met €5 opbrengt) n/n

Dat is ook de essentie van portefeuilletheorie. Als (gecorrigeerd voor risico) obligaties/aandelen 5% netto rente opleveren, dan zijn investeerders bereid om €100 te betalen voor vastgoed dat netto €5 euro opbrengt 4/n

En telkens wanneer de belastingen op alternatief kapitaal worden verhoogd (effectentaks, RV), zien we een verschuiving naar vastgoed (wat bij inelastisch aanbod de prijzen verhoogt) 3/n

Ik ken het onderzoek. We beschikken zelf over data >20% Belgische populatie. Daaruit blijkt dat de overgrote meerderheid van gezinnen niet in de buurt komen van hun potentiële leencapaciteit. Hoe verklaar je dat? 2/n