It's quite unbelievable that supply chains still haven't recovered and are not even that close to full recovery. The size of the COVID shock has simply been significantly underappreciated. And these supply chain issues are in real terms (not just higher prices and can't be quickly fixed) - like delivery delays or lead times. I thought supply chain issues would have dissipated by now.

As long as the real costs remain higher than pre-pandemic levels, the inflation rate will remain elevated, as the inflation rate depends on the level of real marginal costs. That's what the Economic models of central banks tell us:


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