CPI measures rents that people are currently paying, under leases that can be slow to reflect market conditions. Meanwhile, measures of market rent have increased a lot more than 6.5 percent over the last two years.
First, I will examine three emerging trends that seem to define the post-crisis economy. These three trends are: mismatches in the labor market, lower trend growth, and the end of wage disinflation. I will then turn to the possible root causes of these symptoms. I will identify four: demographic trends, balance-sheet adjustment, the influence of information and communication technology, and globalization/polarization.