Quoted: The U.S. last experienced rampant inflation four decades ago. “We have very short memories,” says Steven Deller, an economist in the University of Wisconsin College of Agriculture & Life Sciences. “We don’t remember what it was like during the 1970s and early 80s, so this is unusual.”
In a recent analysis, Menzie Chinn, an economist at the UW’s Robert M. La Follette School of Public Affairs, writes that inflation averaged just 1.7% in the last decade, at times “raising concerns that inflation was too low.”
But while the current inflation might have first looked like the economy playing catch-up after prices tumbled early in the pandemic, it has since “overshot the trend,” Chinn adds. Big-ticket purchases — cars, appliances and other so-called durable goods — are showing the sharpest increases, Chinn writes on his blog Econbrowser. High real estate prices and rental costs have also been a factor.