Global equity markets have been rocked recently by the spectre of inflation and associated higher interest rates returning. Once inflation is left unchecked for a while, it is very difficult to get it under control again. So it is important to understand the root causes of the current spike in inflation and determine which are structural and which are cyclical.

Much of the reduction in inflation in the past couple of decades has been due to technology driving down the cost of manufactured goods, coupled with much of that production being outsourced to low-wage economies such as those found in Southeast Asia. ..

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