Yves here. Somebody has to do the unpleasant but highly valuable duty of taking the latest bit of Larry Summers bad policy advice apart. A bit of stimulus, supply-chain issues (particularly related to cars) and some catch-up spending and suddenly everyone is freaked out about inflation. For what it’s worth, I’m not seeing it in my spending categories. Confirming that anecdata occasionally have merit, this post confirms that inflation is spotty, as in pronounced in some categories, like the afore-mentioned cars, mis-measured in others, and tame elsewhere.
Many experts expect these sector-specific bottlenecks to get sorted out and for the apparent inflation to abate. However, Covid in India is expected to cause additional supply chain stresses, so we may see price pressures in other areas.