Section IV Extra Credit Sources (for Tufte's ECON 2020, All Sections, Spring 2022)
For 4/4 We have an inflation problem. It is new-ish, but its roots go back about 2 years to around the time the initial national lockdowns ended. It is not minor. The last time we had an inflation problem, it took about 17 years to run its course. It ended with the highest unemployment rate since the Great Depression, and home mortgage interest rates of 16%. And we were warned. Lots of macroeconomists, including me, told students for decades to not push the economy too hard with policy. In 2020 it felt like we were told to get lost. Do note that we were not against using fiscal policy to help out people who were hurting due to COVID-19, lockdowns, and the associated recession. This was an argument about degree not direction. And for macroeconomists, we weren't sure the second Trump stimulus was warranted, and after it passed we were even more certain the Biden stimulus package was unwarranted. (If this sounds self-serving, and you don't believe me, you can go back and check o