Plain English with Derek Thompson This Guy Predicted the 2021 Economy. I Asked Him What's Next.
Feb 4, 2022
In this insightful discussion, Jason Furman, a Harvard professor and Obama administration economist, shares his accurate inflation predictions from last year. He unpacks the complexities behind the current economic climate, including labor shortages and the Great Resignation. Furman discusses how pandemic stimulus measures have impacted inflation and consumer behavior. He also challenges misconceptions about millennials and job stability, revealing their surprising tenure length at jobs. Tune in for valuable economic insights and predictions for the near future!
AI Snips
Chapters
Transcript
Episode notes
Inflation Theory
- The US economy has a limited production capacity.
- Excessive stimulus checks, exceeding this capacity, lead to price increases.
Natural Experiment of Stimulus
- The U.S. passed a large stimulus bill in early 2021.
- Similar economies like the UK and some in Europe did not, offering a natural experiment.
International Comparison
- US inflation is 2-2.5% higher annually than the Euro area over two years.
- This suggests a 4-5% cumulative price difference, indicating the stimulus bill's impact.