On inflation forecasting, everybody has a bit of egg on their faces. New research suggests that a misunderstanding of what was happening with global supply chains might be part of why.

When U.S. inflation first began to heat up in 2021, it was written off by many economists as largely a temporary thing. The interaction of reopening economies with the supply-chain snarls the pandemic had set off caused a burst higher in prices that wouldn’t last. Or, as Federal Reserve policymakers put it when they left rates on hold near zero in November 2021, “Inflation is elevated, largely reflecting factors that are expected to be transitory.”