The prices we pay: Why they matter and where they come from

The extent to which people shop around for the best price for products varies by income level. Households on relatively lower incomes tend to spend more time hunting for bargains and often choose budget options for products where possible. This column presents new evidence using consumer data from the United States, highlighting how prices differ across income groups. It shows how retailers’ response to households’ shopping behaviour reduces inequalities and provides policy-makers with useful lessons for supporting lower-income households.

Understanding the inflation crisis: The importance of a clear narrative

Over the past three years, the global economy has a faced a series of substantial price shocks. The outbreak of Covid-19 in 2020 was followed by Russia’s full-scale invasion of Ukraine in early 2022, putting economies around the world under immense strain. This column highlights the importance of understanding the narrative of these shocks for analysing subsequent macroeconomic conditions. Only when policy-makers have got to grips with the economic effects of these episodes will they be able to deliver sufficient policies to support recovery and resilience.