Economists debate what is causing inflation. : Planet Money The last few months have made us acutely aware of inflation. We all agree that it's making our lives harder, but economists disagree about what's causing it. | Fill out our listener survey: npr.org/podcastsurvey

The debate over what's causing inflation

The debate over what's causing inflation

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Alex Wong/Getty Images
WASHINGTON, DC - JULY 17: Federal Reserve Board Chairman Jerome Powell testifies during a hearing before the Senate Banking, Housing and Urban Affairs Committee July 17, 2018 (Photo by Alex Wong/Getty Images)
Alex Wong/Getty Images

The last few months have been a painful crash course on inflation. We've been forced to become quick learners as the price of rent, gas and other essentials have soared in the first half of 2022.

Economists have a few general explanations for inflation:

Sometimes it happens when increased competition for a limited amount of homes, cars and a number of other essentials drives up their prices. This is demand-pull inflation.

Sometimes it happens when the price of a good or service (like uhhhhhh gas for example) increases dramatically because the cost of producing it is higher. This is cost-push inflation.

Sometimes there's just too much money in the economy.

But economists can't agree so far on what caused this particular bout of inflation, whether it was preventable and most importantly, who or what is to blame.

On today's show, we hear from an economist who says the federal government bears responsibility for our current inflation. And we'll also hear why Federal Reserve Chairman Jerome Powell was so slow to respond to the threat of inflation.

Music: "Tricky Pathos," "Original Squeeze," and "Fantasy."

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