Inflation is demand-driven and persistent
The guest argued that current inflation is predominantly demand-driven, which is slow and persistent, meaning underlying inflationary pressures will remain even if supply-side shocks abate.
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The Callback
Structural shifts reduce US economic recession frequency
41 weeks between these two statements.
The guest's model shows that when fiscal policy is non-Ricardian (not backed by future taxes), government deficits directly stimulate demand and are inflationary.
The guest argued that current inflation is predominantly demand-driven, which is slow and persistent, meaning underlying inflationary pressures will remain even if supply-side shocks abate.