The Uncertainty of Inflation

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Economists have predicted 17 out of the last three recessions, but I trust you more than the average economist. So are we stuck at the moment? Clearly inflation has come down somewhat over the last 12 months, but we're also above that 3% that you posited us where we probably want to be a few minutes ago. And look, one thing economists need to do is be honest about their standard errors. If you look at the survey of professional forecasters in May of 2021, they said there was less than a 1% chance that inflation would exceed 4%.

Jason Furman is a professor of economics in the Economics Department at Harvard and at the Harvard Kennedy School. He also served as the chair of the Council of Economic Advisers under President Barack Obama.

In this week’s conversation, Yascha Mounk and Jason Furman discuss the causes of today’s persistent inflation in the US and whether it is likely to continue; how concerned we should be about the recent failures of mid-sized regional banks; and why America’s share of world GDP has remained resilient over the past decades even though it sometimes feels dysfunctional relative to other developed economies like Germany and Japan.

This transcript has been condensed and lightly edited for clarity.

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