The highly atypical effects of the rise in commodity prices in 2021

When we look at OECD countries, we see that the sharp rise in commodity prices in 2021 is having highly atypical effects: As wages are no longer indexed to inflation, real wages are declining sharply; The weakness of real wages is prevent ing the sharp rise in commodity prices from having a negative effect on corporate earnings; Although this is a negative supply shock, financial and real estate asset prices have continued to rise, as nominal interest rates have not reacted to the inflation and the sharp fall in real interest rates has boosted asset prices. At the macroeconomic level, the shock (the rise in commodity prices) has therefore been borne solely by wage earners.