A clever narrative exercise on the relationship between deficits and inflation. Suggests non-CARES Act fiscal policy explains ~1/3 of 2021-22 inflation.

Very interesting new paper on the impact of deficits on inflation (expectations). The challenge is ofc that financial metrics/bonds measuring inflation expectations, inflation swaps or breakevens, have been remarkably stable and muted despite large realized inflation. Very

This is a very interesting paper on a very important topic: Do deficits cause inflation?

Happy to see this out :) Also soon we'll be posting the first full version of our "HANK-meets-FTPL" follow-up, where we try to connect our results on the deficits-inflation link to the large FTPL literature.

Thanks to Tej Parikh for including our work in today's Financial Times FT Alphaville column

Great paper by Joe Hazell and Stephan Hobler

favorite cite ever, courtesy of Joe Hazell