Inflation and real GDP growth in the U.S.—Demand or supply driven?

We compute the part of real GDP growth and inflation due to structural shocks to aggregate supply and demand. We find that the Covid recession and subsequent recovery in the U.S. were driven by both demand and supply shocks. •Structural aggregate demand and supply shocks are identified.•Supply and d...

Full description

Saved in:
Bibliographic Details
Published in:Economics letters 2023-10, Vol.231, p.111274, Article 111274
Main Authors: Chang, Jui-Chuan Della, Jansen, Dennis W., Pagliacci, Carolina
Format: Article
Language:English
Subjects:
Aggregate shocks
Sign restrictions
Supply and demand growth
Supply and demand inflation
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We compute the part of real GDP growth and inflation due to structural shocks to aggregate supply and demand. We find that the Covid recession and subsequent recovery in the U.S. were driven by both demand and supply shocks. •Structural aggregate demand and supply shocks are identified.•Supply and demand components of real GDP growth and inflation are computed.•Components and observed variables are compared to construct a narrative.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2023.111274