Planet Money The debate over what's causing inflation
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Jun 17, 2022 
Adrian Ma, co-host of The Indicator podcast, dives into the hot debate over inflation. He explores various theories, from supply chain issues to corporate greed, contrasting them with the impact of government spending and Federal Reserve actions. The discussion likens economists to brawlers, each defending their viewpoints on monetary policies and fiscal strategies. Insightful takes on interest rates and the complexities of current economic conditions reveal how low unemployment and high inflation can coexist, captivating listeners with a blend of humor and depth.
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Fiscal Theory of Inflation
- John Cochran believes that inflation is primarily caused by government borrowing and spending, a view called the fiscal theory of the price level.
- This contrasts with many economists who emphasize monetary policy's role.
COVID Stimulus and Inflation
- Cochran points to the $5 trillion COVID stimulus packages as a key driver of current inflation.
- He argues that much of this spending was unnecessary and fueled inflation due to a lack of a clear payback plan.
Fed's Role in Inflation
- Cochran argues that the Federal Reserve's slow interest rate hikes didn't cause inflation.
- He cites periods of low rates and low inflation as evidence, challenging the idea that zero rates inevitably lead to spiraling inflation.