Can Higher Gasoline Prices Set Off an Inflationary Spiral?

In early 2022, with consumer price inflation already high, a spike in the price of gasoline increased public concerns that the U.S. economy could be in for a repeat of the inflationary spiral that gripped the nation in the 1970s and 1980s. During this period, energy price increases created an enviro...

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Bibliographic Details
Published in:Economic review (Kansas City) 2022-09, Vol.107 (4), p.41-3
Main Authors: Melek, Nida Cakir, Dillon, Francis M, Smith, A. Lee
Format: Article
Language:English
Subjects:
Consumer Price Index
Consumer price indexes
Consumers
Consumption
Coronaviruses
COVID-19
Economic conditions
Energy industry
Energy prices
Expectations
Feedback
Forecasts and trends
Gasoline
Gasoline prices
Households
Inflation
Inflation (Finance)
Inflation rates
Pandemics
Powell, Jerome
Prices
Prices and rates
Recessions
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Summary:In early 2022, with consumer price inflation already high, a spike in the price of gasoline increased public concerns that the U.S. economy could be in for a repeat of the inflationary spiral that gripped the nation in the 1970s and 1980s. During this period, energy price increases created an environment where rising inflation and rising inflation expectations reinforced one another until a deep economic contraction broke the feedback loop.
ISSN:0161-2387
2163-422X
DOI:10.18651/ER/v107n4CakirMelekDillonSmith