US Oil Producers Fail to Produce

[Seran]

I wouldn't be carrying water for someone who openly admits they think that government spending isn't a cause of inflation.

"I'm sick of this stuff! American people think inflation is government spending more money. Simply not true!" - Biden, 3/11/2022, Democratic Conference, Philadelphia.

Little to No Effect on Inflation


Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero.


Does our finding, by itself, imply that countercyclical government spending is ineffective at boosting output? Not necessarily. Our paper simply demonstrates that the inflation channel of government spending is not an empirically important way that this spending might affect the economy.

https://www.stlouisfed.org/on-the-ec...tion#authorbox