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The Mystery of Inflation

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The Mystery of Inflation

October 27, 2021

Inflation is a mystery, is it transitory or just limited to a few different goods like energy and used cars? The picture below is median PCE inflation and its dispersion, or the price increases of goods whose increases are in the 90th and 10th percentile (or prices went up a lot or a little) from the San Francisco Fed. It is surprising that even though prices are up, and for certain goods seem to be up a lot, price dispersion is still normal by historical standards. This means inflation is more pervasive that skeptics may realize. 

Source: San Francisco Fed

Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.

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