The inflationary consequences of Russia’s war will spread

LAST SUMMER, amid mounting alarm about inflation in America, economic advisers in the White House penned a blog post in which they examined historical parallels. Although the press was full of comparisons with , they wrote that a nearer relative was the dislocation after the second world war, when supply shortages interacted with pent-up demand. It was a well-reasoned argument. But the surge in commodity prices over the past month, in the wake of Russia’s invasion of Ukraine, gives rise to an unsettling question: is the global economy now seeing a 1970s-style price shock on top of a late-1940s-style supply crunch?To be sure, no serious economist expects inflation in the rich world to reach the giddy double-digit heights of those episodes. On March 16th the Federal Reserve raised interest rates for the first time since 2018, kicking off a tightening cycle that it expects to continue well into next year. Moreover, the retreat in oil markets in recent days could offer relief.