Political economist Mark Blyth, of Brown University, just released his new book: Inflation: A Guide for Users and Losers. I had a chance to sit down with him and understand why he and his co-author think Americans can expect more inflation over the next few decades than we are used to.

Blyth discusses the complexities of inflation, challenging traditional views that attribute it solely to monetary policy. He emphasizes the role of supply shocks, market concentration, and the varying impacts of inflation on different income groups. Blyth also explores the implications of technology and policy responses to inflation, highlighting the disconnect between official inflation measures and the lived experiences of consumers. The discussion concludes with insights on navigating an inflationary future and the importance of understanding the underlying economic dynamics.

Mark’s Major Points

• Inflation is influenced by various factors beyond just money supply.
• Supply shocks, like those from COVID, are likely to continue to drive inflation.
• Some corporations have been exploiting inflation to increase prices beyond costs.
• The impact of inflation varies significantly across income levels.
• Interest rates are a blunt tool for managing inflation.
• Market concentration increases the likelihood of inflation.
• Technological advancements can have both inflationary and deflationary effects.
• Official inflation measures often fail to capture the real experiences of consumers.
• Understanding the dynamics of inflation is crucial for navigating economic challenges.