On Supply-Side Inflation and Some Unconventional Indicators for Measuring Inflation

Vakhtang Charaia, Vladimer Papava


The paper provides an analysis of the inflation problem caused by the COVID-19 pandemic and continued by Russia’s war against Ukraine, through different channels, including global supply chain disruption, increased governmental spending, decreased supply of goods and, etc. Inflation, which in this case was supply-side driven inflation, caused serious debates in terms of how to tackle the challenge. Should central banks use their standard instruments and is it enough to use the old-fashioned inflation index to create an economic recovery and anti-inflationary policies for different countries, especially when speaking about import-dependent, consumer-style developing countries? Herein, we analyze the most recent challenges of the inflationary process, starting from the point of how it launched and finishing with the issue of how to overcome this current crisis. Some unconventional macroeconomic indicators are also offered for governments and central banks for a better and more in-depth understanding of inflation and for the creation of better policy vis-à-vis inflation.

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DOI: https://doi.org/10.22158/ibes.v5n4p23


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