Sumner, and I, think it’s mostly real supply issues (chassis, restrictions at port of LA). The trick with the general supply chain, rather than particular supply chains, is that it affects a lot. But, as jmh says, if it were Fed-induced aggregate demand, inflation should probably be even more broad-based. And even if the increase is due to a sectoral shift in quantity demanded in goods vs. services, that’s not an aggregate demand (i.e., Fed) source; the Fed doesn’t control the services-money and goods-money supplies, they control the money supply.
The supply chain is subject to the bullwhip effect. Something you hear about in April 2020 (e-commerce), leads to something else in December 2020 (container shortage) to even worse in 2021.
https://www.econlib.org/inflation-is-it-supply-or-demand/
Sumner, and I, think it’s mostly real supply issues (chassis, restrictions at port of LA). The trick with the general supply chain, rather than particular supply chains, is that it affects a lot. But, as jmh says, if it were Fed-induced aggregate demand, inflation should probably be even more broad-based. And even if the increase is due to a sectoral shift in quantity demanded in goods vs. services, that’s not an aggregate demand (i.e., Fed) source; the Fed doesn’t control the services-money and goods-money supplies, they control the money supply.
The supply chain is subject to the bullwhip effect. Something you hear about in April 2020 (e-commerce), leads to something else in December 2020 (container shortage) to even worse in 2021.
And the market is liking what the Fed is doing in terms of mediun-term inflation expectations, suggesting this inflation is forecasted to be...transitory (I think it is helpful evidence, but it is by no means the last word): http://econbrowser.com/archives/2021/11/what-remains-of-the-inflation-scare-of-october-2021