Quantifying the Inflationary Impact of Fiscal Stimulus Under Supply Constraints

Julian di Giovanni, Ṣebnem Kalemli-Özcan, Alvaro Silva, Muhammed A. Yildirim

This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy on U.S. inflation over the Dec-2019 to June-2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and that the fiscal stimulus contributed half or more of the total aggregate demand effect

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Year of publication:	January 2023
Authors:	Di Giovanni, Julian ; Kalemli-Ozcan, Sebnem ; Silva, Álvaro ; Yıldırım, Muhammed Ali
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Finanzpolitik \| Fiscal policy \| Wirkungsanalyse \| Impact assessment \| Gesamtwirtschaftliche Nachfrage \| Aggregate demand \| Inflation \| USA \| United States \| 2019-2022