A temporary supply shock should cause a similarly temporary increase in the price level

This means that, if recent inflation had been caused by the two supply shocks of 2022, it would have initially risen above the canonical 2% target, then fallen below it as the shocks faded. 

This is not the case in the United States or in the eurozone: stripping out the impact of falling energy prices, inflation continues to run at about 4-5%.

Daniel Gros Project Syndicate 7 August 2023

https://www.project-syndicate.org/commentary/central-bank-asset-purchases-contribution-to-inflation-us-eurozone-by-daniel-gros-2023-08


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