A common story about the recent inflation surge in the United States – particularly among members of the Transitory team – is that the surge is largely due to global supply shocks, such as rising prices energy, chip shortages and various bottlenecks as a result of the global pandemic. So why aren’t we seeing a similar surge in inflation in Japan? Inflation there is running at about the same rate as before the pandemic. See below. (Click on the image to enlarge it.) I’m puzzled.