Professor Sebnem Kalemli-Ozcan on the Fed's Path

The video discusses how the current inflationary period, influenced by COVID-19, differs from past episodes due to sectoral shifts and persistent inflation. It highlights the impact on vulnerable populations and the challenges faced by policymakers in controlling inflation. The role of monetary policy and structural economic changes are analyzed, with a focus on global inflation challenges and central bank responses. The potential long-term effects of technological advancements on inflation are also explored.

How does the current inflation episode differ from past ones?

• It is driven by technological advancements.

• It is caused by a global financial crisis.

• It has a sectoral dimension and persistent inflation.

• It is primarily due to energy price hikes.

Why is it important to control inflation quickly?

• To reduce the burden on vulnerable populations.

• To lower interest rates.

• To increase government revenue.

• To boost international trade.

What is a major reason for the slow impact of monetary policy on inflation?

• Lack of government support.

• Structural shifts in the economy.

• High levels of consumer debt.

• Rapid technological changes.

What risk do central banks face when addressing inflation?

• Focusing too much on energy prices.

• Ignoring technological advancements.

• Starting too late and pausing too early.

• Starting too early and pausing too late.

What is a potential long-term effect of AI on inflation?

• Immediate reduction in inflation.

• Increased productivity leading to deflation.

• Uncertain impact on productivity and inflation.

• Rapid increase in inflation.

How might deglobalization affect inflation?

• It will have no impact on inflation.

• It will reduce the frequency of supply shocks.

• It will lead to more supply shocks and higher prices.

• It will stabilize prices globally.

What is a key challenge for global central banks in managing inflation?

• Balancing technological growth with inflation control.

• Focusing solely on domestic issues.

• Managing the timing of policy interventions.

• Competing with each other for resources.