HomeEconomyAccording to One Economist, Stimulus Checks Contribute to Inflation

According to One Economist, Stimulus Checks Contribute to Inflation

Several variables contribute to the current level of inflation in the United States. Dr. Joshua Robinson, an economics professor at the University of Alabama at Birmingham, believes that the stimulus cheques that many people received last year play a significant role because they placed money directly into people’s pockets.

In January 2022, inflation was 7.5 percent higher than in January 2021, with the economy circulating moreover $20 billion.

Robinson believes the stimulus legislation and recovery acts were important to prevent the economy from collapsing, but he also feels that with more money to spend on the same goods and services, prices increased.

stimulus check & Stimulus Checks Contribute to Inflation (2)
According to One Economist, Stimulus Checks Contribute to Inflation

“The trade-off is that we’ve put ourselves at risk for the inflation we’re witnessing now,” Robinson explained. “Now the Fed needs to ease up on the brakes a little.” But they must do so gradually since if they do so too soon, they risk causing a recession.”

Robinson said that unemployment was 14 percent during the epidemic, however, he noted that it was closer to 17 percent — figures that may be deemed “depression-like.”

It will take at least a year, according to the UAB professor, for everything to return to normal.

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