The COVID-19 pandemic and resulting supply chain shortages have contributed to the highest U.S. inflation rate since the 1980s, resulting in a reporter’s question about the impact of rising prices that elicited a curse this week from President Joe Biden.
The consumer price index has increased 7% over the past 12 months, driven in part by stimulus checks that fed the economy during the low points of the pandemic, notes Robert Triest, chair and professor of economics at Northeastern.
The United States and other governments “pumped a lot of money into their economies in order to prevent economic collapse as the pandemic started,” says Triest. “Those government policies, both on the fiscal side as well as the monetary side, were extraordinarily effective.”
The pandemic also caused supply chain issues that have contributed to a higher demand for goods, he adds.