Structural Inflation

Structural inflation is inflation that's resistant to monetary policy and economic conditions.

It results from fundamental shifts in an economy's supply and demand dynamics.

Examples of its causes might include:

  • Long-run labour shortages
  • Bad long-term policymaking
  • Regulatory changes

Structural inflation typically requires structural changes to mitigate effectively, such as improving productivity, investing in infrastructure, or reforming labour markets.

Fixing structural inflation necessitates policy interventions that address underlying economic inefficiencies rather than short-term actions like interest rate adjustments.

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