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Kenan Institute 2024 Grand Challenge: Business Resilience
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Market-Based Solutions to Vital Economic Issues

Up to the Minute: Wage-Price Spiral

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For much of 2022 economic forecasters, including those at the Federal Reserve, assumed that higher inflation rates would be short-lived – shifting back toward the Fed’s 2% target as supply-chain bottlenecks were resolved and a pandemic-induced shift in demand for consumer goods swung back toward consumer services. Instead, recent inflation prints have set 40-year records and we are seeing more discussion about the possibility of a “wage-price” spiral. In this short video, Kenan Institute Executive Director Greg Brown examines the factors which can lead to a wage-price spiral – and assesses the risk of a spiral causing even higher and more persistent inflation in the U.S. over the next few years. Read Professor Brown’s full analysis here.


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