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The Real Inflation Risk

While the risk of sustained US inflation should not be ignored, nor should it cloud our view of what is really at stake in the current post-pandemic economy. American democracy is in trouble, and a robust, inclusive government-led recovery may offer the last best chance of putting it on a sounder footing.

CAMBRIDGE – With the annual inflation rate in the United States reaching 5% in May, economists and investors are right to be apprehensive about deficit spending, public debt, and the risk of sustained price growth – which is higher now than it has been for almost four decades. But it would be a mistake to respond to these concerns by pumping the brakes on the economy.

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