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"To the extent that aggregate output declines and income support is financed by a one-time increase in the national debt, the result is likely to be a one-time increase in the price level. In other words, Americans should prepare themselves for a temporary burst of inflation. https://twitter.com/GeorgeSelgin/status/1335223823755599873
"To be clear, a higher price level is not inevitable, since much depends on how the demand for U.S. Treasury securities responds going forward.
"But should the inflation rate suddenly spike, this is not a signal to tighten monetary or fiscal policy, as long as the spike is temporary.
"The higher price level that would accompany this event should be understood as the mechanism through which purchasing power is redistributed over the course of the pandemic."
