Americans are struggling with the highest inflation in 40 years, but they are not alone.
Since the euro currency was introduced, prices in the European Union have risen faster than at any other time. The annual inflation rate in the United Kingdom hit a 30-year high in December. Canada's consumer prices are rising twice as fast as before.
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In Japan, where prices have been depressed almost continuously since the collapse of the real estate bubble, the central bank has revised upward its assessment of inflation risks for the first time in eight years. China has the lowest inflation rate among major economies.
Americans are feeling inflation.
The post-pandemic recovery is prompting some central banks to focus on inflation fighting.
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Since the 2008 financial crisis, global forces such as the rise of cross-border supply chains and a decline in workers' bargaining power have kept inflation subdued.
A mismatch between the goods that are being produced and those that customers want to buy is helping drive prices higher. According to research by the Blackrock Investment Institute, long-term trends such as increased protectionism, rising Chinese wages and the adjustment to a low-carbon economy will put upward pressure on prices in the years ahead.
There was a time when global forces were clearly disinflationary. Eric Winograd is a senior economist with AllianceBernstein in New York.
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In the United States, the Federal Reserve is considering a mix of global and domestic factors as it prepares to tackle 7 percent inflation, the highest among all major economies. Rate hikes are expected to begin in March when the Fed's policymaking committee signals on Tuesday.
Wage increases are being wiped out by inflation.
Nathan Sheets, global chief economist for Citigroup, said that part of what they are seeing in the U.S. is similar to what they are seeing in the rest of the world. It is unique to our circumstances and the strength of U.S. aggregate demand.
Snarled global supply chains, afflicting ports in Rotterdam and Shanghai as well as in Los Angeles, are driving up costs around the world. Food and energy costs are increasing as well.
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The price of oil has increased over the past year. In automotive and aerospace plants, nickel is up 27 percent. Coffee has doubled in price.
Customers in the United States are being hit with those bills. According to the Bureau of Labor Statistics, the prices of imports have risen over the past year. Since 2007, that was the largest one-year increase.
Major U.S. companies are raising retail prices. Last week, P&G told investors that freight costs were up $300 million and that higher commodity costs meant a $2.3 billion annual head wind. The company said it raised prices in all of its product categories.
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The White House believes that inflation will decline in the second half of the year because of a robust recovery. At the White House on Friday, President Biden nodded to global forces.
The president said that the pocketbook felt the effects of inflation and higher prices. When a factory shuts down in one part of the world, the production and shipments of goods to shops and homes and businesses all over the world gets disrupted.
The structure of the U.S. economy and the lavish financial rescue that was used to fight the swine flu are some of the reasons why Americans are seeing more rapid inflation.
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Congress approved a total of $6 trillion to keep Americans whole as the economy went into free fall. Household balance sheets were lifted by stock markets in the U.S.
According to the Fed, the US household net worth has increased since the end of the year. Americans' disposable income rose during the Pandemic.
Millions of Americans shifted their spending from restaurants to the purchase of goods during the work-from- home era. Suppliers struggled to keep up with demand as they were forced to raise prices on durable goods.
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The price of durable goods has gone up more than four times the increase for services over the past year.
The inflationary impulse is different outside of the United States. According to the International Monetary Fund, rising fuel costs meant more expensiveFertilizer, which meant higher food prices in Africa. The region's inflation last year jumped to 9 percent from 6 percent, due to the fact that food makes up 40 percent of consumption spending.
Employers in Europe are paid to keep their workers on the job, but usually at less than 100 percent pay. In a speech last week, the chief economist for the Organization for Economic Cooperation and Development said that European consumption remains depressed, unlike in the United States, where direct government checks drove a consumer spending boom.
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She said that the euro area's largest driver of inflation is energy prices and that they all know why: weather, low gas stocks and reserves, delayed maintenance in infrastructure, not enough investment, particularly in renewables, all of which cannot be resolved rapidly.
Monetary policy can't do much about energy shortages. The monthly asset purchases by the European Central Bank will be reduced from last year's average of 22 billion to 20 billion over the course of this year.
The Bank of England last month became the first central bank in a Group of Seven nation to raise interest rates.
The anti-inflation fight could mean a rough ride for financial markets as central banks begin raising borrowing costs.
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The Fed is expected to begin raising its lending rate in March, according to many economists. The three major US stock indexes are all in the red this year, with the tech-laden Nasdaq down more than 10 percent.
There are implications beyond the U.S. borders with the Fed's move toward tighter monetary policy.
If the U.S. rates are raised, capital will likely be drawn away from developing countries. They will suffer weaker growth if they do.
There would be serious negative spillovers if major economies took a U-turn on their monetary policies. The Chinese President said last week in a virtual address to the World Economic Forum that developing countries would bear the brunt of challenges to global economic and financial stability.
Several central banks raised interest rates last month. The Bank of Russia raised its key rate for the seventh time in 2021, citing a delayed harvest and a shortage of new cars.
Elvira Nabiullina, the Russian central bank's chief, said last month that uncertainty over the course of the swine flu could delay the easing of price pressures.
In China, where the economy is slowing, the central bank cut key lending rates last week.
Some of the international influences on inflation are temporary. Supply chain disruptions will sort themselves out eventually. Covid is expected to become a chronic irritant.
According to the investment institute, inflationary global forces are likely to last.
The return of key supply chains to the United States is being promoted by the Biden administration.
China used to be a source of low-cost labor for multinational corporations.
New, more costly energy sources will be required as a result of the transition to a low-carbon economy.
Not everyone is convinced that the effects will be dramatic. Winograd expects inflation to rise to 2.5 percent in the next several years, up from the average of 1.8 percent in the decade after the financial crisis.
Few are offering any guarantees after all the economic surprises delivered by the Pandemic.
Forbes is an economist at the Massachusetts Institute of Technology.
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