In our latest CIO Special – Inflation and the money multiplier – we look at current inflation dynamics from a monetary perspective. We argue that:
- Despite the recent pick-up in inflation rates, it is still difficult to see inflation as a purely monetary phenomenon
- While broad monetary aggregates have grown, money multiplier and velocity ratios have fallen
- Factors such as changing consumer inflation expectations could however still refocus attention on the money multiplier, given high liquidity levels
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