How Biden’s Spending and Powell’s Fed Drove Our Inflation Catastrophe
\n\nAt the end of almost every Agatha Christie mystery, the great detective gathers the suspects together to reveal the identity of the killer. In Peril at End House, Hercule Poirot assembles the principal characters at a Cornish mansion to explain who was really behind a series of sinister events. The clues have been there all along. Now comes the moment when everything falls into place.
\n\nWe’ve reached that stage in the great inflation debate. Economists Domenico Giannone of Johns Hopkins University and Giorgio Primiceri of Northwestern University have arrived to play the role of Poirot.
\n\n“Post-covid inflation was predominantly driven by unexpectedly strong demand forces,” they write in a new National Bureau of Economic Research working paper. “These demand forces reflected a combination of surprisingly robust pent-up demand following the pandemic restrictions, stronger-than-expected expansionary fiscal policies, and an unusually accommodative monetary stance.”
\n\nIn other words, the culprit was excessive demand, fueled by the Biden administration’s massive spending programs and the Jerome Powell Federal Reserve’s easy money. The much-demonized supply chains played a surprisingly small role in the worst inflation in four decades.
\n\nGiannone and Primiceri estimate that demand accounted for…
Original source: https://www.breitbart.com/economy/
