Harvard University professor and closely-watched economist Ken Rogoff told CNBC that 2018 could bring "inflation in a way we haven't seen" and could rise above 2 percent in the U.S.
"I think this is the year when inflation in the U.S. goes over 2 percent," Rogoff told CNBC at the World Economic Forum in Davos, Switzerland.
Inflation data released in mid-January showed that core CPI (consumer price index) in the U.S. increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November. It was the biggest gain seen in 11 months for the index.
"It's not that far off it now," Rogoff added. A 2 percent inflation rate is targeted by the U.S. Federal Reserve, although the bank has increased interest rates three times in 2017 as it seeks to normalize monetary policy after almost a decade of stimulus.
"Ten years past the financial crisis and we could see a period where, instead of talking about 'secular stagnation' as our mutual friend Larry Summers likes to do, we're going to be seeing growth upgrades that we haven't seen, we're going to see investment like we haven't seen and we might see inflation in a way we haven't seen," Rogoff said.
"And central bankers are going to have to ask themselves 'how long can we hold back?'," he noted, adding that he would "much rather see inflation overshoot" than policymakers crush the recovery prematurely.