As economies recover from the unprecedented shock of the novel coronavirus (COVID-19) pandemic, inflation rates in advanced economies have risen at their fastest pace in many years (Chart 1). In fact, both producer and consumer prices in the United States and Europe recently recorded their highest rates in decades.
In Japan, producer prices have also risen at the highest rate in about 40 years, i.e., since the second oil shock, but the pace of increase in consumer prices remains sluggish compared with the United States and Europe.