Counter point:
Inflation due to large monetary stimulus may appear through a bullwhip affect as demand eventually stresses fixed-capacity capital intensive industries. Once these industries are strained higher costs may radiate outwards.
Inflation due to large monetary stimulus may appear through a bullwhip affect as demand eventually stresses fixed-capacity capital intensive industries. Once these industries are strained higher costs may radiate outwards.
What evidence is there that it will radiate outwards at a rate significantly above the Fed’s target for an extended period of time?
A single advancement in worker automation could easily provide enough productivity gains to offset wage growth. A single plant disease or new political treaty could massively effect food and or energy costs. The system is chaotic.
Offhand however, the top capital constrained industries that I can think of (in rough order) include.
1. Semi 2. Housing 3. Automotive/heavy manufacturing 4. Energy
Which are all experiencing shortages/rapid price increases. If the hypothesis holds we would see price increases in other fields which depend on the above. If the supply disruption/demand disruption hypothesis holds then we should see a normalization of prices in the above industries.
It is still less of a school to the economy than the beginning of the pandemic was. Threading the needle to manage this period has to be extremely difficult for policy makers.
That's when considering "stimulus" as broader than the unconditional (but means-tested) direct payments--colloquially "stimmy checks." Following is from a quick search and to the best of my knowledge; I'm in a high cost of living area and fortunate to have kept a job past the individual cutoff for stimulus checks:
Direct stimulus was $3200 to eligible individuals across three checks. Some amount of that was banked for dependents too.
Increased refundable child tax credit was increased from $2000 to either $3000 or $3600 per child per year and the Democrats are trying to persist that in the build back better act.
The US also did increased unemployment -- $300 a week in extended unemployment benefits. Which totals $15,600 a year on top of existing amounts. The first $10k in unemployment was made tax-free. I've heard e.g. Canada had a high percentage of salary backed by the government in unemployment, however there was a total dollar cap that was fairly low.
US had PPP loans that lefties (disclaimer: I'm one) on social media (disclaimer: I'm not) complained about going to businesses, but very likely let some business keep people on the payroll in the first place as intended.
Mortgage forbearance, eviction moratoriums.
Freezing of payments and interest accrual on student loans that is still going on, and when (if?) it restarts will have stopped the accrual of interest for about two years.