One Global Shock, Many Inflation Paths: Explaining Post-COVID Inflation Divergence

2026

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This paper analyzes the divergence in post-COVID inflation outcomes across countries, identifying key drivers and transmission mechanisms.

* Examines the structural, institutional, and policy determinants of post-pandemic inflation dynamics using cross-country regressions and local projections.
* Investigates the pass-through of energy price shocks to headline inflation and how it has changed in the post-COVID period.
* Highlights the role of historical inflation, energy price shocks, and policy responses in shaping inflation persistence and divergence.

Tags: inflation, COVID-19, supply shocks, energy prices, monetary policy

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