budget surplus

The Debt Ceiling, Monetary Policy, and Inflation

Antonio Graceffo

In times of economic downturn, such as the 2008 financial crisis or the pandemic lockdown, the government enacts expansionary fiscal and monetary policy to “stimulate” the economy and create jobs. These policies also create inflation and many economists argue that the growth is illusory. The pandemic-related spending and stimulus caused inflation  to reach 9.1% in June 2022.

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