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Opinion
Tyler Cowen

Worried About Inflation After Covid? Don’t Be

The end of the pandemic is more likely to lead to demand rationing than price increases.

How much would you pay to be on that beach?

How much would you pay to be on that beach?

Photographer: PASCAL POCHARD-CASABIANCA/AFP

Does the world need to fear inflation again? The global supply of money has been rising at a rapid clip, with the broader measure increasing by more than 20% last year in the U.S. alone. With an economic recovery and boom likely to follow the distribution of vaccines, many people are worried that all this cash will lead to higher prices.

I have some reassuring news (albeit with caveats): It is not likely that the next major macroeconomic problem will be inflation.