Determinants of Inflation in Oecd Countries After the Covid-19 Pandemic

High inflation has been prevailing almost in all countries since the Covid-19 pandemic. This paper explores the main drivers of inflation in OECD countries after the pandemic by using recent data. Our empirical model is estimated with the Ordinary Least Squares (OLS) method applied on cross-sectional data for OECD countries in 2022. The main result confirms that fiscal and monetary expansion during and after the pandemic are strongly associated with high inflation across countries. Other important finding suggests that democracy seems to be an important factor in countries to have less inflation rate. In other words, our study shows that less democratic countries face higher inflation rates. We also find that government debt to GDP ratio is negatively associated with inflation rate. Specifically, we contribute to inflation debate by analyzing the political stability with money and fiscal growth in the same model.