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urmomaisjabbathehutt t1_j1h5dhb wrote

The link i provided refer to that

so the while the case study of St lous federal reserve indicate that goverment spending had little to no effect

On the other hand, modern studies have found that the current link between government spending and inflation may be stronger.In particular, the 2022 inflation spike followed two major federalspending programs under two administrations. The first, the CARES Act, passed in March 2020, while the American Rescue Plan passed in March 2021.Collectively, these initiatives aimed to minimize the economicdevastation of Covid-19 by distributing three stimulus checks, expanding unemployment benefits and providing extra funds to state and local governments.While experts have credited these Acts with possibly preventing a recession, economists have also found that their passage correlates with an unusual spike in inflation. By providing extra capital to American households, economists note, consumers were able to go out and spend money they wouldn’t have had otherwise. In turn, this increased consumer demand, pulling up prices.However, a recent analysis from the San Francisco Federal Reservefound that government spending only contributed to about threepercentage points of today’s inflation. These findings corroborate an October 2021 paper that suggested stimulus checks made inflation slightly worse – but not to the extent we’re seeing now

basically if they are right goverment spending may affect inflation depending on how is been used but is not the cause the main reasons for the current inflation we are seeing

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