What is driving high inflation and what makes these economic times so unique?
Anyone who spends money on anything — which is basically everyone — knows that we’re living in a time of high inflation. From groceries and gas, to home values and rent prices, and new and used car values, consumers in the U.S. are spending more on most essential items.
But, while the current inflation rate is around 8.5% unemployment is low — currently around 3.5% — and wages have increased over the course of the last year or so, many leading economists didn’t really see these high-inflation times that we’re in coming.
Just a few months ago in June, Chair of the Federal Reserve of the United States, Jerome Powell, said “I think we now understand better how little we understand about inflation.”
To try to get a handle on what makes these post-pandemic shutdown economic times so unique, what exactly is driving the high inflation, and how our current economic climate compares to the late 1970s and early 1980s which is the last time we saw inflation this high, we’re joined today by Matthew C. Klein. He is founder of The Overshoot, it’s an online publication that focuses on the intersection of economics, finance, business, and public policy.
He is also co-author of the 2020 book “Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace.” In the past Matthew has worked for Bloomberg, the Financial Times, and most recently he was the Economics Commentator for Barron’s.
We spoke with on Wednesday, August 10.