Track C · MacroNode C4
Inflation regimes
Layer 1 · Pocket
~ 30s readThe thirty-second answer
What is this?
Demand-pull, cost-push, expectations-driven, fiscal-dominant. Same headline number, four different causes, four different cures. Knowing which one you're in is the whole game.
Why should I care?
The right policy response is regime-dependent. Hiking into a supply shock destroys output without curing prices. Sitting on your hands in an expectations-driven regime entrenches it. The quadrant tells you which mistake is on the table.
Four regimes · four cures
- Demand-pull
- gentle hikes
- Cost-push
- wait it out
- Expectations-driven
- Volcker
- Fiscal-dominant
- fiscal consolidation