And Now, A Little Perspective On Inflation

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Photo: Maks Karochkin on Flickr

The Federal Reserve recently released a working paper on the impact of changes in the natural rate of unemployment on inflation rates in the G7 economies. And while it’s certainly worth a read, there was a series of charts in the report that stood out to us.These charts show the inflation rates in the G7 economies since 1960. If you look back at those last 51 years, the inflation problems people are ranting about today appear like nothing compared to what many people used to struggle with.

It’s this sort of contextualization that’s important to keep in mind. It doesn’t mean that inflation isn’t creeping up, and isn’t causing problems. It just means that the alarmist views of our current inflation situation may be a bit out of control.

Canada's inflation rate hit 12.90% in 1981. It is now at 3.3%.

Source: Statistics Canada, Inflation.eu

Note: Stats for annual inflation

France's inflation rate hit 15.16% in 1974. It is now at 2.2%.

Source: Inflation.eu, Eurostat

Note: Stats for annual inflation rate.

Germany's inflation rate hit 6.12% in 1980. It is now at 2.7%.

Source: Inflation.eu, Eurostat

Note: Stats for annual inflation rate.

Italy's inflation rate hit 25.24% in 1973. It is now at 2.9%.

Source: Inflation.eu, Eurostat

Note: Stats for annual inflation rate.

Japan's inflation inflation rate hit 24.80% in 1974. It is now at 0.0%.

Source: Inflation.eu

Note: Stats for annual inflation rate.

The UK's inflation rate hit 26.97% in 1975. It is now at 4.5%.

Source: Inflation.eu, UK Statistics

Note: Stats for annual inflation rate.

The US inflation rate hit 13.29% in 1979. It is now at 3.2%.

Source: Inflation.eu, BLS

Note: Stats for annual inflation rate.

But that doesn't mean everything is perfect.

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