Home⇛Psychology and Education: A Multidisciplinary Journal⇛vol. 48 no. 9 (2025)

Anatomy of a Global Inflation Surge: A Systematic Review of Its Drivers and Consequences

Allen Grace M. Sarmiento

Discipline: Economics

 

Abstract:

This study presents a systematic literature review that synthesizes contemporary research on the drivers, impacts, and policy responses to recent global inflationary trends. Amid vigorous debate over the persistence of current price pressures, this study analyzes the complex interplay of demand-pull effects, cost-push shocks, and expansive monetary policy that characterizes the modern inflationary landscape. By systematically evaluating empirical research from high-impact, peer-reviewed journals, the review examines the methodologies, data, and key variables employed in the economic literature to measure and analyze inflation. The synthesis reveals a broad consensus on the critical role of credible monetary policy, particularly inflation-targeting (IT) frameworks, in anchoring expectations and stabilizing economies. These frameworks are shown to effectively manage the propagation of shocks and create a predictable environment for investment. However, the findings underscore that policy effectiveness is highly context-dependent, with institutional quality and structural vulnerabilities having a significant influence on outcomes, especially in emerging markets. The study concludes that managing inflation requires a holistic and integrated strategy. Adequate price stability necessitates coordinating credible monetary policy with prudent fiscal management and structural reforms to mitigate supply-side constraints.



References:

  1. Ascari, G., Florio, A., & Gobbi, A. (2018). High trend inflation and passive monetary detours. Economics Letters, 172, 138–142. https://doi.org/10.1016/j.econlet.2018.08.030
  2. Bambe, B.W. (2023). Inflation Targeting and Private Domestic Investment in Developing Countries. Economic Modelling, 125, 106353. https://doi.org/10.1016/j.econmod.2023.106353
  3. Banerjee, J. J. (2024). Inflationary oil shocks, fiscal policy, and debt dynamics: New evidence from oil-importing OECD economies. Energy Economics, 130, 107249–107249. https://doi.org/10.1016/j.eneco.2023.107249
  4. Banerjee, S. (2017). Empirical Regularities of Inflation Volatility: Evidence from Advanced and Developing Countries. South Asian Journal of Macroeconomics and Public Finance, 6(1), 133–156. https://doi.org/10.1177/2277978717695157
  5. Borio, C. (2024, June 30). Monetary policy in the 21st century: lessons learned and challenges ahead. Www.bis.org. https://www.bis.org/publ/arpdf/ar2024e2.htm
  6. Chan, J., Clark, T., & Koop, G. (2018). A New Model of Inflation, Trend Inflation, and Long-Run Inflation Expectations. Journal of Money, Credit and Banking, 50(1), 5–53. https://doi.org/10.1111/jmcb.12452
  7. Chatterjee, T., Bhattacharjee, K., & Das, R. C. (2024). Long-run and Short-run Dynamic Linkages Among Capacity Utilization, Inflation, and Per Capita Income: Theoretical and Empirical Enquiries for a Panel of Countries. Global Business Review. https://doi.org/10.1177/09721509231219318
  8. Chowdhury, P., Paul, S. K., Kaisar, S., & Moktadir, Md. A. (2021). COVID-19 pandemic-related supply chain studies: A systematic review. Transportation Research Part E: Logistics and Transportation Review, 148(102271), 102271. Ncbi. https://doi.org/10.1016/j.tre.2021.102271
  9. Coibion, O., Gorodnichenko, Y., Kumar, S., & Pedemonte, M. (2020). Inflation expectations as a policy tool? Journal of International Economics, 124(103297). https://doi.org/10.1016/j.jinteco.2020.103297
  10. Cruz, C. J. (2022). Reduced macroeconomic volatility after adoption of inflation targeting: Impulses or propagation? International Review of Economics & Finance, 82, 759–770. https://doi.org/10.1016/j.iref.2022.06.005
  11. de Soyres, F., Santacreu, A. M., & Young, H. (2022). Fiscal policy and excess inflation during Covid-19: a cross-country view. Www.federalreserve.gov. https://www.federalreserve.gov/econres/notes/feds-notes/fiscal-policy-and-excess-inflation-during-covid-19-a-cross-country-view-20220715.html
  12. Deluna, R. S., Loanzon, J. I. V., & Tatlonghari, V. M. (2021). A non-linear ARDL model of inflation dynamics in the Philippine economy. Journal of Asian Economics, 76, 101372. https://doi.org/10.1016/j.asieco.2021.101372      
  13. Elsevier Author Services. (2020, March 13). What Is Journal Impact Factor? | Elsevier Author Services Blog. Elsevier Author Services - Articles. https://scientific-publishing.webshop.elsevier.com/research-process/what-journal-impact-factor/
  14. Fujii, T. (2013). Impact of food inflation on poverty in the Philippines. Food Policy, 39, 13–27. https://doi.org/10.1016/j.foodpol.2012.11.009
  15. Gindler, A. (2025, June 19). Understanding Inflation: Causes, Mechanisms, and Interconnections: News Article - Independent Institute. Independent Institute. https://www.independent.org/article/2025/06/14/inflation-causes/
  16. Goyal, A. (2015). Understanding the High Inflation Trend in India. South Asian Journal of Macroeconomics and Public Finance, 4(1), 1–42. https://doi.org/10.1177/2277978715574614
  17. Guo, Y., Liu, F., Song, J.-S., & Wang, S. (2024). Supply Chain Resilience: A Review from the Inventory Management Perspective. Fundamental Research, 5(2), 1–14. https://doi.org/10.1016/j.fmre.2024.08.002
  18. Ha, J., Kose, M. A., & Ohnsorge, F. (2022, May 22). Is high inflation here to stay? Brookings. https://www.brookings.edu/articles/is-high-inflation-here-to-stay/
  19. Hernández, J. R., Ventosa‐Santaulària, D., & Valencia, J. (2024). Global supply chain inflationary pressures and monetary policy in Mexico. Emerging Markets Review, 58, 101089–101089. https://doi.org/10.1016/j.ememar.2023.101089
  20. Hoenink, J. C., Garrott, K., Jones, N. R. V., Conklin, A. I., Monsivais, P., & Adams, J. (2024). Changes in UK Price Disparities between Healthy and Less Healthy Foods over 10 years: an Updated Analysis with Insights in the Context of Inflationary Increases in the cost-of-living from 2021. Appetite, 197 (107290), 107290–107290. https://doi.org/10.1016/j.appet.2024.107290
  21. Jusaj, Y. (2025). Inflation Dynamics: A Comprehensive Analysis of Key Determinants Using Panel Data. Journal of Risk Analysis and Crisis Response, 15(1), 12. https://doi.org/10.54560/jracr.v15i1.549
  22. Kamber, G., & Wong, B. (2020). Global factors and trend inflation. Journal of International Economics, 122, 103265. https://doi.org/10.1016/j.jinteco.2019.103265
  23. Kaur, S. (2021). A Decade of Impact of Monetary Policy on Food Inflation: An Overview and Future Direction. Vision: The Journal of Business Perspective, 097226292110156. https://doi.org/10.1177/09722629211015603
  24. Klein, M., & Linnemann, L. (2023). The composition of public spending and the inflationary effects of fiscal policy shocks. European Economic Review, 155, 104460–104460. https://doi.org/10.1016/j.euroecorev.2023.104460
  25. Kreamer, J. (2022). Financial intermediation and the supply of liquidity. Journal of Financial Stability, 101024. https://doi.org/10.1016/j.jfs.2022.101024
  26. Okimoto, T. (2019). Trend inflation and monetary policy regimes in Japan. Journal of International Money and Finance, 92, 137–152. https://doi.org/10.1016/j.jimonfin.2018.12.008
  27. Paré, G., & Kitsiou, S. (2017). Methods for literature reviews. National Library of Medicine; University of Victoria. https://www.ncbi.nlm.nih.gov/books/NBK481583/
  28. Pham, T. A. T., Nguyen, T. T., Nasir, M. A., & Duc Huynh, T. L. (2020). Exchange rate pass-through: A comparative analysis of inflation targeting & non-targeting ASEAN-5 countries. The Quarterly Review of Economics and Finance, 87. https://doi.org/10.1016/j.qref.2020.07.010
  29. Solimano, A. (2020). Stagflation in the 1970s, Globalization, and the Financial Crisis of 2008–2009. A History of Big Recessions in the Long Twentieth Century, 88–113. https://doi.org/10.1017/9781108755276.005
  30. Stojanovikj, M., & Petrevski, G. (2024). The choice of monetary regimes in emerging market economies: Inflation targeting versus its alternatives. International Review of Economics & Finance, 93. https://doi.org/10.1016/j.iref.2024.03.024.
  31. Zhao, H. (2022). On the impacts of trend inflation in an open economy. Journal of International Economics, 138, 103648. https://doi.org/10.1016/j.jinteco.2022.103648

Tools


Copyright © 2026  KITE Digital Educational Solutions |  Exclusively distributed by CE-Logic