We answer the question posed by the title by specifying and estimating a simple dynamic model of prices, wages, and … product-market and labor-market shocks on prices and nominal wages and to quantify the sources of U.S. pandemic-era inflation …, most of the inflation surge that began in 2021 was the result of shocks to prices given wages. These shocks included sharp …

correlations between labor market tightness and wages weakened noticeably. This change was accompanied in a break in the … relationship between wages and prices, so wage inflation has become a much less important determinant of price inflation …

's assumption that wage bargainers are influenced by relative money wages rather than relative real wages. In Taylor's model money … that wage bargainers are influenced by relative real wages, which we consider somewhat more plausible, has some interesting … implications for the empirical estimation of models with staggered wage contracts (see especially Taylor, 1980b) …

exerts significant downward pressure on nominal wages. Finally, we consider the monetary policy implications of the …