##es returning to the labor force. older workers are still retiring at higher rates, and retirees do not appear to be returning to the labor force in sufficient numbers to meaningfully reduce the total number of excess retirees. 10 the second factor contributing to the labor supply shortfall is slower growth in the working - age population. the combination of a plunge in net immigration and a surge in deaths during the pandemic probably accounts for about 1 - 1 / 2 million missing workers. 11 policies to support labor supply are not the domain of the fed : our tools work principally on demand. without advocating any particular policy, however, i will say that policies to support labor force participation could, over time, bring benefits to the workers who join the labor force and support overall economic growth. such policies among those 55 and over, transitions into retirement are currently well above the average rate in the three years before the pandemic ( after adjusting for population controls ). at the same time, retirees are returning to the labor force at a rate similar to that before the pandemic. first, due primarily to covid, mortality over the past few years has far exceeded what had been expected before the pandemic. this channel accounts for about 400, 000 of the labor force shortfall. total deaths due to covid are much larger — about 1 million people. however, the effect on the labor force is smaller than this because covid deaths have mostly been among older people, who participate in the labor force at lower rates than younger people. second, due, at least in part, to pandemic - related restrictions on entry into the united states, total immigration has slowed substantially since the start of the pandemic, lowering the labor force by about 1 million people relative to pre - pandemic trends. while lawful, nonpermanent immigration ( for example, h - 1b and h - 2b visa holders ) has bounced back considerably since earlier in the pandemic, these categories of immigration are generally still below 2019 levels. meanwhile, lawful permanent immigration ( that is, new green card holders ) is also somewhat lower than in 2019 and well below levels that prevailed earlier in the 2010s. regarding undocumented immigration, while migrant encounters at the u. s. – mexico border have been high lately, some estimates suggest the number of undocumented immigrants in the united states is not much different than in 2019. ( for data on legal immigration, see u. s. department

: “ aggressive ” monetary tightening is better than gradualism – the costs of increasing the target rate of inflation outweigh the benefits my takeaways • the authors ’ model shows that standing at the end of 2020, it would have been difficult to forecast the increase in inflation we observed in 2021 and 2022 my takeaways • • • the idiosyncratic nature of the pandemic implies that economic models, while still useful in many respects, are going to have limited applicability for example, current inflation dynamics are affected by pandemicspecific factors illustration : – core goods ( the black line ) – housing services ( the blue line ) – core services excluding housing ( the red line ) my takeaways • current core inflation is more persistent than most observers suggest, but this is not due to lack of credibility in the central bank • evidence in support of central bank credibility is that long - term inflation expectations are not far from the fomc ’ s 2 percent target conclusions • history is useful, but it can only tell us so much, particularly in situations without historical precedent • the current situation is different from past episodes in at least 4 ways • economic models are important tools, but sound decision making requires that their findings be complemented with additional analytical tools