The Unassuming Economist

John H. Cochrane, Senior Fellow at the Hoover Institution (Stanford University) writes about the inflationary impact of pent-up demand in the post-pandemic period in his blog, The Grumpy Economist. He writes:

“Milton Friedman once said that if you want inflation, you can just drop money from helicopters. That is basically what the US government has done. But this US inflation is ultimately fiscal, not monetary. People do not have an excess of money relative to bonds; rather, people have extra savings and extra apparent wealth to spend. Had the government borrowed the entire $5 trillion to write the same checks, we likely would have the same inflation.”

In the subsequent sections, he discusses reasons why the Covid-19 related fiscal stimulus produce inflation when previous stimulus efforts from 2008 to 2020 fizzled.

Click here to read the full blog.

The National Council of Applied Economic Research (NCAER) recently hosted Dr. Gita Gopinath, currently serving as the Chief Economist at the IMF for a discussion on the outlook for global growth in 2022. Among other things, the discussion touched upon topics like vaccination for protection against Covid-19, inflationary pressures in several countries, and the unique set of challenges before policymakers.

Watch the full video here.

Former chief economist of the World Bank and chief economic adviser to the Government of India, Dr. Kaushik Basu, wrote for a recent column at Project Syndicate about countries’ widely disparate experiences with inflation today.

“From the US and Brazil to Turkey and India, growing price pressures are leaving policymakers facing some difficult decisions. Unlike in many previous global inflationary episodes, what is remarkable this time is how different the cross-country experiences have been.“

He observes that the world’s recent collective brush with inflation today is very different from the past because even while recovery from Covid-19 led disruptions is a common feature of all economies, their diverse responses to the crisis have churned out diverse economic scenarios.

Click here to read the full article.