The inflation spectrometer

Even as some inflationary impulses fade, others of more recent vintage pose new and bigger risks; one must disentangle multiple strands to reduce risk of policy errors

An idealised wave has a predictable pattern, with smooth, alternating up and down moves. The reason waves in the real world (like those in the sea or light waves from a remote galaxy) appear so complex is that there are multiple waves interfering with each other, creating apparently unpredictable patterns. A spectrometer helps disentangle this jumble of electromagnetic waves, say, to know the age of a galaxy.

It is similarly possible to isolate some economic impulses behind the seemingly complex inflation trends. In theory, inflation is a macroeconomic phenomenon, and analysing it by category is unwise, as prices shift both supply