Published on Tuesday, October 26, 2021

Mexico | Ineffective monetary policy in the face of bottlenecks

Inflation in most countries is at levels significantly higher than those observed in the last decade and above the objectives of their respective central banks.

Key points

  • Key points:
  • In Mexico, where Banco de México's target is 3%, inflation was 6% per year in the same month.
  • The great discussion that today occupies economists and analysts at a global level is whether or not it is a temporary phenomenon.
  • High global inflation is largely due to bottlenecks in the supply chains of manufactured goods due to a sharp rise in demand and logistical problems after a year and a half of the pandemic.
  • The fact that high inflation is not structural and is not explained by aggregate demand pressures does not mean that it is not a problem and that policies should not be implemented to attack it.

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