Inflation and savings-investment equilibrium

In the United States and the United Kingdom, inflation in the recent period has been associated with a shortfall in supply of goods and services relative to demand for goods and services. This is therefore “normal” inflation linked to a situation of excess demand for goods (insufficient savings relative to investment). But inflation in the euro zone and Japan is associated with excess supply of goods (excess savings). In both countries/regions, inflation is therefore not due to an imbalance in the goods and services market; it is due only to the prices of imported products, not to a domestic imbalance. Restrictive monetary policy can therefore correct inflation in the United States and the United Kingdom, but not in the euro zone or Japan.