https://www.stlouisfed.org/on-the-econo ... -inflation
A quote:
I'm sure you can find something that takes the other view as, from what I've seen, there is disagreement about it.Across the board, we found almost no effect of government spending on inflation. For example, in our benchmark specification, we found that a 10 percent increase in government spending led to an 8 basis point decline in inflation. Moreover, the effect is not statistically different from zero.
Me, I am comfortable with thinking that if government spending has any effect on inflation it is minimal if it exists at all. That's because, as I am wont to do, I looked up data on the matter and analyzed it myself. It looked to me like there MAY be some lag effect whereby spending results in SOME tendency towards higher inflation 2 to 3 years later. But we're talking about spending in year 1 accounting for about 7% of the variation in inflation 2 years later and 8% of the variation in inflation 3 years later.
We're not having the high inflation we have now because of the COVID-19 spending packages. If the spending packages are a factor at all they are a minor one. That's not where most of the year over year difference in prices is coming from.