Biden stimulus will not move inflation much – Chicago Fed paper


Research published by the Chicago Fed finds that the American Rescue Plan (ARP), the recently passed stimulus package, will likely have only a small and short-term impact on inflation.

The authors – Francesco Bianchi, Jonas Fisher and Leonardo Melosi – say only a belief that the US will abandon orthodox policies would cause a substantial spike. They consider such an event unlikely.

The paper uses four Phillips-curve models to predict the stimulus’s influence on prices. In three of these models

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