Inflation Is Down. It’s a Supply-Side Story.
September 8, 2023
Supply-Side Expansion Has Driven the Decline in Inflation
With the steep deceleration of inflation in the first half of 2023, the fears of a sustained, 1970s-esque scenario are now behind us.
And the primary reason for that disinflation is an expansion of supply, Roosevelt’s Mike Konczal explains in a new brief.
“[A]t the moment, the inflation story is exactly what a ‘soft landing’ would have predicted,” Konczal writes.
“A combination of resolving supply shocks and a subtle decrease in demand has driven inflation down dramatically, with no cost to the level of employment.”
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— Alí R. Bustamante, Ph.D. (@DrAliBustamante) September 4, 2023