Inflation has surged across much of the developed world in the past year as COVID-19 lockdowns eased and pent-up demand for goods and services collided with ongoing supply chain snafus.

But inflation is running higher in the United States than just about anywhere else right now. Why's that? According to a new paper from four economists at the Federal Reserve of San Francisco, it's because the American government was relatively more generous during the pandemic, borrowing and spending trillions of dollars to not only fund COVID-19 relief efforts but to line the pockets of Americans with direct payments that enlarged the money supply and overheated the economy.

"Inflation rates in the United States and other developed economies have closely tracked each other historically," the economists write in an analysis published this week. "However, since the first half of 2021, U.S. inflation has increasingly outpaced inflation in other developed countries. Estimates suggest that fiscal support measures designed to counteract the severity of the pandemic's economic effect may have contributed to this divergence."