An incisive blogpost about a contested issue in economics. Part of what makes Arnold Kling a most reliable public intellectual is his sure grasp of 'knowledge problems' in society.
Compare Bryan Caplan's recent blogpost about inflation:
"What’s so bad about inflation, anyway? Economists have struggled to come up with a good answer. The best story, in my view, is that inflation causes recessions via politics: Voters hate inflation so much that politicians willingly endure severe recessions to get it under control. So while there’s a long-run trade-off between inflation and unemployment at low inflation rates, high inflation is a leading cause of high unemployment."
I find persuasive Arnold Kling's answer to the question, What's so bad about inflation?:
"Our economic environment is now filled with noise, making it harder to extract signals. The harms that this causes will never be calculated. The process of calculation itself is what has been damaged."
Arnold Kling harnesses the economics of information. Bryan Caplan appeals to behavioral political economy: rational, self-interested politicians adapt to irrational beliefs of voters about inflation.
My wife is a partner at a small firm that has to bid on contracts that last a few years. Inflation makes this very difficult. For the most part if inflation is higher then expected they underbid and lose money. If another firm thinks it will be lower they underbid them for the contract.
What people at her firm are trained to do with figure out how to manage costs between suppliers, not forecast the overall inflation rate. But the overall inflation rate is more important to their success at this point than their actual jobs.
It's the same with hiring. They claim they can't hire anybody. I say just pay more. She says if they pay too much they can't win contracts. I say inflation is high so just charge more for the contract anticipating needing to pay more. But there is no way to know if my forecast is correct.
Instead of figuring out if a contractor would be 3% less expensive or this material versus that material makes the most sense, being novice inflation forecasters determines their bottom line.
To accommodate “a wealthy Russian, a wealthy Chinese, or a wealthy Iranian, [who] want[s] to have dollars in American banks, ‘just in case’,” are there not banks in other countries that offer dollar accounts? The American government tries to impose its sanctions on foreign countries, too, but there must be some with a history of resisting—perhaps Luxemburg, the Cayman Islands, or Singapore would be small enough to fly under the U.S. radar.
Was the dollar stable from 1960-1980? What was stable? The assumption that currency must be a stable media isn't supported historically, how stable your media is, whatever it is, is going to be tied to the stability of economic outcomes.
I've been watching the spread between 10 yr TIPS and the 10 yr T and it has widened as of today to about 2.7% from about 1.2% back in June of '20. To me this says that the market still expects inflation to be transitory. https://fred.stlouisfed.org/graph/?g=N4fR Thoughts?
One interpretation is that the thing that will kill a short-term or 'transitory' inflation trend enough to restore low rates in the long term is the expectation of a nice, hard recession in the middle. The Fed will hope the war takes the blame for that one.
“Second, the promiscuous use of debt financing by the American government has finally unleashed inflation that is rapid and unpredictable.”
You are wrong, however. By the time Paul Volcker left the Fed (1987), the federal government’s deficit was still large (see https://www.thebalance.com/us-deficit-by-year-3306306) but had changed its financing: from the inflation tax to debt financing. Since 1987, there has been two periods (2009-12 and 2020-21) in which the deficit was much larger and financed by borrowing, not by the inflation tax. Indeed, no government can continue financing its deficits by borrowing forever. Sooner or later, the cost of borrowing will increase high enough to make a fiscal adjustment necessary (relax, I’m not going to tell you about Argentina in the past 75 years or in the past seven days, or in the past few hours). So far, the huge deficit (a flow) and the service of the huge debt (a stock) have not unleashed inflation but we cannot ignore the high probability that the spending promises of your senile President and his barbarians will lead soon to a much higher cost of borrowing and therefore to your senile President starting to play Argentina’s games to finance the huge deficit.
Like or not, the accumulated increases in price indexes during the past 12 months —in your country and in Chile and other countries— have been the result of large changes in relative prices, in particular the higher prices of energy. You still prefer to ignore how relative prices lead to changes in nominal prices (some increase a lot, but only a few decrease enough to offset the increases).
I am curious, what do you think is driving the increases in some prices relative to others, such that the net effect of relative price changes is increased inflation (what drives the relative price changes that drive changes in nominal prices.) It seems that it can't be simple supply and demand given that the income and total wealth constraints must limit that.
On Tuesday, the WSJ had an article with a much greater details but I cannot find it (it had a very nice graph highlighting the large differences in changes in the nominal prices of several goods in the past 12 months).
As you can see in the report, in the past 12 months, the prices of "energy" and "energy materials" have increased much more than the prices of other categories used in the report. I'm sure that at a more disaggregated level there is some goods and services whose nominal prices have declined in the past 12 months, but most have risen although much less than "energy" and "energy materials". We know that for a number of reasons there have been significant changes in both the supply and the demand for "energy" and "energy materials" in the past 12 months. The large price increases of "energy" and "energy materials" should have increased the nominal prices of some other goods over and below the average increase of the producer price index but also decreased the nominal prices of a few goods.
Now, in my comments I have not discussed the critical question of how central banks respond when there is an "energy" price shock (or a X price shock). In the 1960s, we relied on the idea of passive money to analyze this issue: if a price shock implied a large increase in all price indexes, the central bank could accommodate the increase by printing money to avoid the negative effect of the increase in price indexes on consumption, investment and output. If the central bank accommodated, then after some time (usually well over a year) we could see that the money supply increased but the increase was not due to "the inflation tax" hypothesis that assumes that an active central bank, one printing money to finance the government.
That's sort of what I am getting at: if inflation wasn't caused by governments printing/borrowing money to avoid cut backs in consumption of various sorts, how do prices adjust upwards across the board? If their is a finite amount of money, and that money moves around through the finance system (instead of literally being buried in a hole) the only way that all prices can go up over all should be printing more money, or bringing in more money/demand from outside the country. (Arguably banks can create more money by way of increased fractional lending, but I think that argument needs to be made such that it allows for 7-10% price inflation in the face of shrinking production. It might be possible to make that argument, I don't know.)
So I still don't see how total spending can increase without 1: Money coming out of holes in the ground, 2: central banks printing money, or 3: consumption decreasing outside the measured country's economy to put money into the economy in question.
(Incidentally, this is one reason I hate the modern use of inflation as "prices went up" instead of the pre-later 20th century version of "creating more money". A different word for prices going up that has nothing to do with the creation of more money would be really handy.)
A X price shock doesn't imply that total spending increases. Often it decreases and thus why some economists press the central bank to accommodate the increase in the price indexes. I could tell you many stories about this type of situation outside the U.S. but if you look at what happened in the U.S. after the oil price shock of 1973, you can easily understand the negative impact of the shock and increases in price indexes on total spending and the subsequent pressures on the Fed to accommodate those increases (until Paul Volcker's intervention).
Before saying a few words at what is going on today in the U.S., let me say your accounting/theoretical explanation based on orthodox macroeconomics and/or Friedman's monetary theory of income is wrong and has never explained anything. Just remember that Friedman never (and Scott Sumner never) could explain what the relevant M (that is, measure of money) is for the theory to make sense. Forget the accounting identity and focus on the supply of M? controlled by the central bank and the demand for M? being "stable" (whatever it means). There is no M? for which both conditions are met (maybe some M000 is controlled by the central bank but it's never stable and other M888 is stable but never controlled by the Fed).
Today, in the U.S., we observe a large energy price shock which has led to increases in all price indexes with the prospect of a decline in total spending and output. The Fed has been borrowing to finance the government for the past 35 years but the senile President and his economists don't know what to say and much less what to do. Like Arnold, most economists think that the increases in price indexes during the past 12 months are due to inflationary pressures originated in the Fed's borrowing to finance the deficit. Yesterday, they succeeded in forcing a change in the Fed's response and they will regret the incoming recession.
Ahhh so you have a very non-standard economics approach to explaining inflation. I am not leaning on the accounting identity method, but rather the money as commodity approach as much as anything. Still, I do not understand how prices for everything increase without a decrease in real consumption without money creation happening somewhere.
If you are claiming that real consumption is down, then I could totally see that happening. I just haven't heard anyone making that claim recently, but then no one seems to want to talk about inflation much these days.
Wow. Now you talk about some commodity approach to money and about real consumption rather than total spending. In the past 40 years we have learned a lot about systems of payments and the many ways they have been changing at the national and world levels. Today, we should focus on systems of payments (if you want to understand what I'm talking about, I suggest to start reading Eugene Fama's papers on money and banking of around 1980). With respect to real consumption, your point is nonsense because even the useless orthodox macroeconomics focuses on consumption and investment (years ago, John Cochrane --Eugene Fama's son-in-law-- argued that orthodox macro was about the decision to consume today or tomorrow which explained its focus on "the" interest rate rather than in "the" price of an aggregate output which prevented any discussion of relative prices of goods and services).
If you were not trained in orthodox macro in 1950-2000, you'd hardly understand what I'm talking about. Frankly, the only benefit to learn it today is that most aged economists keep relying on it to explain what is going on.
Unfortunately, Arnold has forgotten what he has been writing about orthodox macro in the past 25 years. Arnold has been ignoring the work of professor Richard Wagner (https://mason.gmu.edu/~rwagner/ ). I'm surprised because Richard has been associated first with the Center of Public Choice for decades and has been trying to put together an alternative framework to analyze "the economy" (people interacting simultaneously in many market and non-market processes). Instead, Arnold has chosen Tyler "Nonsense" Cowen as his mentor but he is clueless about "the economy".
Hopefully the Fed's FAIT will be the stabilizer - if they stick to it. They have a clearer mission, more effective tools, and fewer constraints than Congress. They even chose FAIT as their own regime. I'm still (maybe naively) hopeful.
> This raises the cognitive load for you in trying to evaluate how much to save and in what assets, when to buy a house, or whether you need to look for a better-paying job.
Also, the inflationary process becomes self-fulfilling through a winner's curse dynamic. The people who look at the "save" or "spend" question and choose "spend" are the people who expect inflation to be the highest. They think their money will go further now, so they're willing to spend more now. But... that bids prices up and reinforces the inflationary trend.
I think the only honest answer is "I don't know, it is really complicated."
It seems like from the demand side, most governments did a lot to transfer funds to citizens during the pandemic, on top of their normal deficit spending practices. All else equal, that should cause inflation.
From the supply side, the actual production of goods dropped across countries, between lockdowns, people just quitting, voluntary production cutbacks due to fear of infection, etc., plus the international issues as one areas production cuts limited supplies to another area regardless of their local behavior, which limited access down the line to other companies, etc. Much like how trying to sort out the effects of lockdown policies in US states is going to be hampered by those states interacting with states with different policies, at a global level you can't really tell how much of Country A's economic outcomes are due to its own policies vs Country B, C and D's policies. Overall though, goods and services output shrank a lot, which should cause inflation.
Altogether, it seems like we all should have been expecting inflation since early 2020, since clearly production was going to contract and governments were going to throw lots of money they don't have at citizens. The only mitigating factor would be if citizens started saving money really hard and that money didn't make it back into the economy because no one wanted to borrow. That scenario seems possible, but very unlikely.
My guess is that if the world governments did literally nothing, ignoring COVID, we probably would have seen some small upticks in inflation as individuals noticed and got a little extra careful and isolated, dropping production a bit. Every policy actually taken could be expected to increase inflation rates. If government had cut spending significantly that might have lowered inflation, but I don't think the usual moves of raising interest rates would have done anything as lending wasn't exactly out of control. The US stepping back from the usual practices around screwing with the food, energy and housing markets might have helped ease things, but then those usually are not included in official inflation statistics anyway (I wonder if that is related...)
Yea lockdown were a very bad idea. For a week or two maybe, but for longer was nuts.
Regarding saving, I'd bet that if the government didn't throw money at people during an economic blip just in case they might need it once in a while, the cultural norm of saving for a rainy day would come back right quick. Just like how constant bailouts make banks ignore risk and run excessively lean. I am more inclined to let banks learn that they need to stop relying on the gov first, but the lesson is the same. We have gotten really bad about destroying the incentives for foresight and prudence.
It is worth pondering how much specifically US policy is to blame for current inflation rates when they are suddenly much higher in many other countries too. For example, in the nine months from March to December of 2021, New Zealand CPI growth rate jumped from 1.5% to 5.9%. Even deflationary Japan jumped from -1.1% to +0.8% in the same period.
One can say that what happens in the US ripples out everywhere somehow, maybe all the central banks are trying to stay in narrow bands and avoid overvaluation? Still, that seems kind of a stretch. The alternative explanation for simultaenous international timing just as the pandemic fades away is that it's because of the pandemic. The latter explanation seems more in keeping with Occam's Razor than the first story.
An incisive blogpost about a contested issue in economics. Part of what makes Arnold Kling a most reliable public intellectual is his sure grasp of 'knowledge problems' in society.
Compare Bryan Caplan's recent blogpost about inflation:
"What’s so bad about inflation, anyway? Economists have struggled to come up with a good answer. The best story, in my view, is that inflation causes recessions via politics: Voters hate inflation so much that politicians willingly endure severe recessions to get it under control. So while there’s a long-run trade-off between inflation and unemployment at low inflation rates, high inflation is a leading cause of high unemployment."
Link: https://betonit.blog/2022/03/15/inflationary-austerity/
I find persuasive Arnold Kling's answer to the question, What's so bad about inflation?:
"Our economic environment is now filled with noise, making it harder to extract signals. The harms that this causes will never be calculated. The process of calculation itself is what has been damaged."
Arnold Kling harnesses the economics of information. Bryan Caplan appeals to behavioral political economy: rational, self-interested politicians adapt to irrational beliefs of voters about inflation.
My wife is a partner at a small firm that has to bid on contracts that last a few years. Inflation makes this very difficult. For the most part if inflation is higher then expected they underbid and lose money. If another firm thinks it will be lower they underbid them for the contract.
What people at her firm are trained to do with figure out how to manage costs between suppliers, not forecast the overall inflation rate. But the overall inflation rate is more important to their success at this point than their actual jobs.
It's the same with hiring. They claim they can't hire anybody. I say just pay more. She says if they pay too much they can't win contracts. I say inflation is high so just charge more for the contract anticipating needing to pay more. But there is no way to know if my forecast is correct.
Instead of figuring out if a contractor would be 3% less expensive or this material versus that material makes the most sense, being novice inflation forecasters determines their bottom line.
It is not inflation that makes calculation difficult: it is *unexpected* inflation or deflation.
To accommodate “a wealthy Russian, a wealthy Chinese, or a wealthy Iranian, [who] want[s] to have dollars in American banks, ‘just in case’,” are there not banks in other countries that offer dollar accounts? The American government tries to impose its sanctions on foreign countries, too, but there must be some with a history of resisting—perhaps Luxemburg, the Cayman Islands, or Singapore would be small enough to fly under the U.S. radar.
Was the dollar stable from 1960-1980? What was stable? The assumption that currency must be a stable media isn't supported historically, how stable your media is, whatever it is, is going to be tied to the stability of economic outcomes.
I've been watching the spread between 10 yr TIPS and the 10 yr T and it has widened as of today to about 2.7% from about 1.2% back in June of '20. To me this says that the market still expects inflation to be transitory. https://fred.stlouisfed.org/graph/?g=N4fR Thoughts?
One interpretation is that the thing that will kill a short-term or 'transitory' inflation trend enough to restore low rates in the long term is the expectation of a nice, hard recession in the middle. The Fed will hope the war takes the blame for that one.
You assert:
“Second, the promiscuous use of debt financing by the American government has finally unleashed inflation that is rapid and unpredictable.”
You are wrong, however. By the time Paul Volcker left the Fed (1987), the federal government’s deficit was still large (see https://www.thebalance.com/us-deficit-by-year-3306306) but had changed its financing: from the inflation tax to debt financing. Since 1987, there has been two periods (2009-12 and 2020-21) in which the deficit was much larger and financed by borrowing, not by the inflation tax. Indeed, no government can continue financing its deficits by borrowing forever. Sooner or later, the cost of borrowing will increase high enough to make a fiscal adjustment necessary (relax, I’m not going to tell you about Argentina in the past 75 years or in the past seven days, or in the past few hours). So far, the huge deficit (a flow) and the service of the huge debt (a stock) have not unleashed inflation but we cannot ignore the high probability that the spending promises of your senile President and his barbarians will lead soon to a much higher cost of borrowing and therefore to your senile President starting to play Argentina’s games to finance the huge deficit.
Like or not, the accumulated increases in price indexes during the past 12 months —in your country and in Chile and other countries— have been the result of large changes in relative prices, in particular the higher prices of energy. You still prefer to ignore how relative prices lead to changes in nominal prices (some increase a lot, but only a few decrease enough to offset the increases).
I am curious, what do you think is driving the increases in some prices relative to others, such that the net effect of relative price changes is increased inflation (what drives the relative price changes that drive changes in nominal prices.) It seems that it can't be simple supply and demand given that the income and total wealth constraints must limit that.
Look at the data on the U.S. producer price index in the report issued last Tuesday:
https://www.bls.gov/news.release/ppi.nr0.htm
On Tuesday, the WSJ had an article with a much greater details but I cannot find it (it had a very nice graph highlighting the large differences in changes in the nominal prices of several goods in the past 12 months).
As you can see in the report, in the past 12 months, the prices of "energy" and "energy materials" have increased much more than the prices of other categories used in the report. I'm sure that at a more disaggregated level there is some goods and services whose nominal prices have declined in the past 12 months, but most have risen although much less than "energy" and "energy materials". We know that for a number of reasons there have been significant changes in both the supply and the demand for "energy" and "energy materials" in the past 12 months. The large price increases of "energy" and "energy materials" should have increased the nominal prices of some other goods over and below the average increase of the producer price index but also decreased the nominal prices of a few goods.
Now, in my comments I have not discussed the critical question of how central banks respond when there is an "energy" price shock (or a X price shock). In the 1960s, we relied on the idea of passive money to analyze this issue: if a price shock implied a large increase in all price indexes, the central bank could accommodate the increase by printing money to avoid the negative effect of the increase in price indexes on consumption, investment and output. If the central bank accommodated, then after some time (usually well over a year) we could see that the money supply increased but the increase was not due to "the inflation tax" hypothesis that assumes that an active central bank, one printing money to finance the government.
That's sort of what I am getting at: if inflation wasn't caused by governments printing/borrowing money to avoid cut backs in consumption of various sorts, how do prices adjust upwards across the board? If their is a finite amount of money, and that money moves around through the finance system (instead of literally being buried in a hole) the only way that all prices can go up over all should be printing more money, or bringing in more money/demand from outside the country. (Arguably banks can create more money by way of increased fractional lending, but I think that argument needs to be made such that it allows for 7-10% price inflation in the face of shrinking production. It might be possible to make that argument, I don't know.)
So I still don't see how total spending can increase without 1: Money coming out of holes in the ground, 2: central banks printing money, or 3: consumption decreasing outside the measured country's economy to put money into the economy in question.
(Incidentally, this is one reason I hate the modern use of inflation as "prices went up" instead of the pre-later 20th century version of "creating more money". A different word for prices going up that has nothing to do with the creation of more money would be really handy.)
A X price shock doesn't imply that total spending increases. Often it decreases and thus why some economists press the central bank to accommodate the increase in the price indexes. I could tell you many stories about this type of situation outside the U.S. but if you look at what happened in the U.S. after the oil price shock of 1973, you can easily understand the negative impact of the shock and increases in price indexes on total spending and the subsequent pressures on the Fed to accommodate those increases (until Paul Volcker's intervention).
Before saying a few words at what is going on today in the U.S., let me say your accounting/theoretical explanation based on orthodox macroeconomics and/or Friedman's monetary theory of income is wrong and has never explained anything. Just remember that Friedman never (and Scott Sumner never) could explain what the relevant M (that is, measure of money) is for the theory to make sense. Forget the accounting identity and focus on the supply of M? controlled by the central bank and the demand for M? being "stable" (whatever it means). There is no M? for which both conditions are met (maybe some M000 is controlled by the central bank but it's never stable and other M888 is stable but never controlled by the Fed).
Today, in the U.S., we observe a large energy price shock which has led to increases in all price indexes with the prospect of a decline in total spending and output. The Fed has been borrowing to finance the government for the past 35 years but the senile President and his economists don't know what to say and much less what to do. Like Arnold, most economists think that the increases in price indexes during the past 12 months are due to inflationary pressures originated in the Fed's borrowing to finance the deficit. Yesterday, they succeeded in forcing a change in the Fed's response and they will regret the incoming recession.
Ahhh so you have a very non-standard economics approach to explaining inflation. I am not leaning on the accounting identity method, but rather the money as commodity approach as much as anything. Still, I do not understand how prices for everything increase without a decrease in real consumption without money creation happening somewhere.
If you are claiming that real consumption is down, then I could totally see that happening. I just haven't heard anyone making that claim recently, but then no one seems to want to talk about inflation much these days.
Wow. Now you talk about some commodity approach to money and about real consumption rather than total spending. In the past 40 years we have learned a lot about systems of payments and the many ways they have been changing at the national and world levels. Today, we should focus on systems of payments (if you want to understand what I'm talking about, I suggest to start reading Eugene Fama's papers on money and banking of around 1980). With respect to real consumption, your point is nonsense because even the useless orthodox macroeconomics focuses on consumption and investment (years ago, John Cochrane --Eugene Fama's son-in-law-- argued that orthodox macro was about the decision to consume today or tomorrow which explained its focus on "the" interest rate rather than in "the" price of an aggregate output which prevented any discussion of relative prices of goods and services).
If you were not trained in orthodox macro in 1950-2000, you'd hardly understand what I'm talking about. Frankly, the only benefit to learn it today is that most aged economists keep relying on it to explain what is going on.
Unfortunately, Arnold has forgotten what he has been writing about orthodox macro in the past 25 years. Arnold has been ignoring the work of professor Richard Wagner (https://mason.gmu.edu/~rwagner/ ). I'm surprised because Richard has been associated first with the Center of Public Choice for decades and has been trying to put together an alternative framework to analyze "the economy" (people interacting simultaneously in many market and non-market processes). Instead, Arnold has chosen Tyler "Nonsense" Cowen as his mentor but he is clueless about "the economy".
Hopefully the Fed's FAIT will be the stabilizer - if they stick to it. They have a clearer mission, more effective tools, and fewer constraints than Congress. They even chose FAIT as their own regime. I'm still (maybe naively) hopeful.
Scott Sumner says "The Fed abandons average inflation targeting" https://www.econlib.org/the-fed-abandons-average-inflation-targeting/
> This raises the cognitive load for you in trying to evaluate how much to save and in what assets, when to buy a house, or whether you need to look for a better-paying job.
Also, the inflationary process becomes self-fulfilling through a winner's curse dynamic. The people who look at the "save" or "spend" question and choose "spend" are the people who expect inflation to be the highest. They think their money will go further now, so they're willing to spend more now. But... that bids prices up and reinforces the inflationary trend.
I think the only honest answer is "I don't know, it is really complicated."
It seems like from the demand side, most governments did a lot to transfer funds to citizens during the pandemic, on top of their normal deficit spending practices. All else equal, that should cause inflation.
From the supply side, the actual production of goods dropped across countries, between lockdowns, people just quitting, voluntary production cutbacks due to fear of infection, etc., plus the international issues as one areas production cuts limited supplies to another area regardless of their local behavior, which limited access down the line to other companies, etc. Much like how trying to sort out the effects of lockdown policies in US states is going to be hampered by those states interacting with states with different policies, at a global level you can't really tell how much of Country A's economic outcomes are due to its own policies vs Country B, C and D's policies. Overall though, goods and services output shrank a lot, which should cause inflation.
Altogether, it seems like we all should have been expecting inflation since early 2020, since clearly production was going to contract and governments were going to throw lots of money they don't have at citizens. The only mitigating factor would be if citizens started saving money really hard and that money didn't make it back into the economy because no one wanted to borrow. That scenario seems possible, but very unlikely.
My guess is that if the world governments did literally nothing, ignoring COVID, we probably would have seen some small upticks in inflation as individuals noticed and got a little extra careful and isolated, dropping production a bit. Every policy actually taken could be expected to increase inflation rates. If government had cut spending significantly that might have lowered inflation, but I don't think the usual moves of raising interest rates would have done anything as lending wasn't exactly out of control. The US stepping back from the usual practices around screwing with the food, energy and housing markets might have helped ease things, but then those usually are not included in official inflation statistics anyway (I wonder if that is related...)
Yea lockdown were a very bad idea. For a week or two maybe, but for longer was nuts.
Regarding saving, I'd bet that if the government didn't throw money at people during an economic blip just in case they might need it once in a while, the cultural norm of saving for a rainy day would come back right quick. Just like how constant bailouts make banks ignore risk and run excessively lean. I am more inclined to let banks learn that they need to stop relying on the gov first, but the lesson is the same. We have gotten really bad about destroying the incentives for foresight and prudence.
It is worth pondering how much specifically US policy is to blame for current inflation rates when they are suddenly much higher in many other countries too. For example, in the nine months from March to December of 2021, New Zealand CPI growth rate jumped from 1.5% to 5.9%. Even deflationary Japan jumped from -1.1% to +0.8% in the same period.
One can say that what happens in the US ripples out everywhere somehow, maybe all the central banks are trying to stay in narrow bands and avoid overvaluation? Still, that seems kind of a stretch. The alternative explanation for simultaenous international timing just as the pandemic fades away is that it's because of the pandemic. The latter explanation seems more in keeping with Occam's Razor than the first story.