The Wedge of the Century: Understanding a Divergence between CPI and PPI Inflation Measures
---- Acknowledgments ----
Previously circulated as "On the Divergence between CPI and PPI as Inflation Gauges: The Role of Supply Chains." We thank Pol Antràs, Xuehui Han, Yang Jiao, Miklos Koren, Andrei A. Levchenko, Ernest Liu, Nikhil Patel, Michael Woodford, and participants in the seminars and workshops at the Reserve Bank of Australia, Asian Development Bank, Columbia University, IMF, CEPR, UIBE, University of Melbourne, and University of Tokyo for their valuable comments, and Joy Glazener for editorial assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.