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Inflation vs Inclusion: Stabilization Policy in the Wake of the Pandemic -- by Felipe Alves, Giovanni L. Violante
A quantitative economic study examines the trade-off between inflation control and labor market inclusion in US macroeconomic policy following the COVID-19 pandemic. The research finds that prolonged combined monetary and fiscal stimulus jointly drove inflationary pressures, while either policy alone would have produced milder price dynamics. The study concludes that inclusive fiscal policy paired with a more traditionally inflation-focused central bank would have achieved higher welfare for mos