Summers and the great inflation rate fallacy

Woody Brock  |  Strategic Economic Decisions  |  11 July 2022

On 19 June [after the Fed’s raised rates by 0.75 basis points - Ed], Harvard’s Lawrence Summers was interviewed on Meet the Press for 16 minutes. His topic was inflation. All of his comments focused on a single entity - the Fed. Larry always believed that there had been about $750 billion of “excess stimulus” in the Covid relief measures passed by Congress. This may have led to “excess demand” that in turn helped create inflation. But how much inflation? Econometric estimates suggest that this degree of excess demand would raise inflation by 0.6%, a small fraction of the 7% hike ...

Not yet a Member? It’s quick and free to join. Already a member? Please log in.

What's new with our live and on-demand continuing education, accreditation and certification programs.

Highlight our upcoming live CE programs, and all of the complimentary on-demand CE-accredited resources published over recent months.

Led by behavioural finance expert, Herman Brodie, the Behavioural Finance - Investment Decision-Making course will help you identify, analyse and evaluate the principal human preferences that influence decision-making in situations of uncertainty, so you can recognise and identify these preferences in others, to improve investment decision-making.