Why Is Inflation So Stubbornly High in Some Western Countries Compared to Asia and Europe?
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Anglophone countries like the US, Australia, Canada, and UK are struggling with high, sticky inflation compared to countries in Asia and parts of Europe.
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Possible reasons include more generous fiscal stimulus during COVID, looser monetary policy, high migration influx, and more inflationary mindsets formed from past bouts of inflation.
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Asia has seen inflation expectations fall quickly, perhaps because pre-COVID they were used to low inflation as the norm.
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Southern European countries like Italy and Spain dodged the energy price bullet last year, preventing expectations from worsening.
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Germany's labor market is now very tight, with high wage growth fueling inflation, unlike in the past when workers showed wage restraint.