Pandemic fiscal support had rapid inflationary impact – NBER paper

Covid volatility

Fiscal support measures for consumers in the early stages of the Covid-19 pandemic had a rapid effect on inflation, new research finds.

Galina Hale, John Leer, and Fernanda Nechio compare the impact of fiscal measures in 10 large economies. One of the authors’ innovations is to control for the economic impact of the pandemic by using measures of consumer sentiment, rather than real economic indicators.

Their results, published by the US National Bureau of Economic Research, show that most of

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