China Is Missing from the Great Inflation Debate
Once again, massive fiscal spending in the United States has invited warnings of inflation and triggered dark memories of the 1970s. But these fears are based on a model that has since been obliterated by economic realities – not least the rise of China, which has fundamentally reshaped the US and global economies.
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AUSTIN – The scale of US President Joe Biden’s American Rescue Plan (ARP) – $1 trillion in spending for this year, another $900 billion after that, plus a $3 trillion infrastructure and energy program that has been promised – has spooked many macroeconomists. Are their fears justified?