Fiscal Inflation
April 22 2022. In Populism and the Future of the Fed, James Dorn, Ed. Washington DC: Cato Institute Press, 119-130. An essay prepared for presentation at the Cato Institute 39th annual monetary policy conference. Video of the conference presentation. The covid inflation was a classic fiscal helicopter drop. It was not a monetary drop. I explore why this fiscal event caused inflation, and previous ones did not; why people did not expect this one to be repaid. Future inflation will come from future fiscal and monetary policy, but future monetary policy will be constrained by fiscal affairs. I summarized this essay for the Ghost of Christmas Inflation in Project Syndicate and used part of it for Ch. 21 of Fiscal Theory of the Price Level. (Last manuscript here.)