My understanding is that Russian inflation in recent years is considered to be running in the 5-6 % range, while US and Canada - in the 2-3% range (as measured by price increases/CPI). But I'd expect that the inflation of the money supply in Russia is much lower than in North America, as the Russian government spending deficit is in the low single digits % of GDP, while US and Canada annual budget deficits are both above 15% of GDP in 2020, necessitating much higher amounts of money printing by central banks.
Are my assumptions incorrect, or is there a logical explanation of this phenomena? Does money supply inflation not translate into price inflation, are there other forces at play, etc?
[EDIT] I understand that the relationship is not direct (as per Krugman), but I want dig into what could be happening in this particular example.
- Is CPI misrepresenting actual price inflation in 'some' of these countries (so nothing to explain)?
- Is money velocity different between them, affecting the value of money in each of these countries differently?
- Are international trade and currency exchange rates a factor?
- Have the recent Canadian and US increased deficits have not been prolonged enough, and inflation is behind the corner?
- Is USD status of a reserve currency - an important factor?
Or Something else...