The proof is overwhelming. As Steven Kopits feedback:

Sure, Powell and Yellen [are at fault for causing the inflation and resulting banking crisis]. Nothing new there.

And, sure, the US can export inflation. If a US fiscal impulse goes right into a full employment (or upwardly constrained employment) financial system, then the distinction will present up in imports. We’d anticipate to see a blow-out within the commerce deficit and clogging of ports. Which we did. And we might anticipate that provide chains the world over could be below strain with value will increase throughout the globe. Which we did. So, sure, greatest I can inform, the US is ready to export inflation.

I feel Steven Kopits meant Biden, not Yellen, in his remark, since Dr. Janet Yellen hasn’t been Fed chair since 2018; or perhaps he did imply Yellen as the one that he blames for fiscal coverage. In any case, this graph proves indisputably he’s proper!

Determine 1: CPI for US (blue), Euro Space (tan), UK (inexperienced), Sweden (lilac), Poland (brown), and Korea (sky blue), all not seasonally adjusted, in logs, 2021M01=0. NBER outlined peak-to-trough US recession dates shaded grey. Supply: BLS, Eurostat, OECD through FRED, and writer’s calculations.

After all, there’s not a variety of empirical proof to help the view that US financial coverage drives overseas inflation in the way in which Mr. Kopits posits. See for example Determine 2 in Caldara, Ferrante, and Queralto (2022). At 8 quarters, the impact of a 100 bps change within the Fed funds price on overseas inflation is close to zero. Should you’re not bothered by the shortage of empirical proof, then Swedes (and much more so Poles), blame Powell (or Yellen or Biden, whoever you don’t like) to your troubles! Don’t be concerned that every one these nations have alternate charges that float relative to the US greenback…

Determine 2 beneath depicts year-on-year inflation for these economies.

Determine 2: Yr-on-Yr CPI inflation for US (blue), Euro Space (tan), UK (inexperienced), Sweden (lilac), Poland (brown), and Korea (sky blue). NBER outlined peak-to-trough US recession dates shaded grey. Supply: BLS, Eurostat, OECD through FRED, and writer’s calculations.