Larry Summers

The Biden $1.9 trillion stimulus will set off US inflation pressures of a kind not seen in a generation (roughly since the early 1990s or before).

“There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation”

Said on

4 February 2021 · Washington Post op-ed, "The Biden stimulus is admirably ambitious. But it brings some big risks, too." (quoted by the Boston Globe)

Source

Larry Summers was right on inflation. Let's hope his recession forecast is wrong. · The Boston Globe

Should come true

No date given

How sure they sounded

there is a chance; while there are enormous uncertainties

Categories

EconomyPolitics

Importance

4 of 5 · US inflation surge affected global interest rates, markets and living costs worldwide.

Outcome

Unresolvable

Summers framed this as "There is a chance that..." stimulus would set off generational inflation, which is a possibility rather than a forecast, so the hedge rule makes it unresolvable. The warning is famous because inflation did reach 9.1% in June 2022, the highest since 1981, but the record cannot be credited as a forecast.

Evidence:

• https://www.bls.gov/news.release/archives/cpi_07132022.htm
• https://www.bostonglobe.com/2022/04/14/business/larry-summers-was-right-inflation-lets-hope-his-recession-forecast-is-wrong