Regarding the latter episode, it must be emphasized that this was mainly due to massive unemployment before and during the crisis, after three and a half years of a continuous decline in output. The significant excess supply of labor was by far the main factor explaining the low pass through.
Yet, during the following 12 months, inflation exceeded 40 percent, mainly as a result of realignment in the relative prices of tradable goods. When unemployment began to be reabsorbed, inflation pressures resumed their upward trend.