4 Although this shift in emphasis originated in the advanced economies, emerging market and developing economies eventually followed suit, with many of them bringing down high rates of inflation and formally adopting an inflation targeting policy framework.
For example, anecdotal reports suggest that businesses have been finding it difficult to recruit well-qualified workers in certain occupations. What implications does the pickup in labor costs have for price inflation? One possible outcome is that increases in labor costs will largely be absorbed by a narrowing of firms' profit margins and not be passed on to consumers in the form of higher prices.