Recovery and the Risk of Inflation In the Post-COVID-19 EconomyRecovery and the Risk of Inflation In the Post-COVID-19 Economy

With the onset of the COVID-19 pandemic came depression-like declines in output and employment. The U.S. government reacted quickly and boldly with unprecedented fiscal and monetary stimulus. Now, as we look at the depth of the recession and the government’s response, we consider how the recovery will play out. 

That leads to two important questions that we’ll address. First, is the economy like a light switch, turned off to fight the pandemic, then turned on afterwards, with the light as bright as before? Or, will this recession, like the three that preceded it, have a long recovery stretching far into the future? Second, will the rush to implement extraordinary fiscal and monetary policy lead to unintended consequences, or does the dept...