Economics professor says stimulus checks contribute to inflation
BIRMINGHAM, Ala. (WBMA) - There are several factors that contribute to the inflation seen across the United States.
Dr. Joshua Robinson, a professor of economics at the University of Alabama at Birmingham, said the stimulus checks many received last year play a big part as they put money directly into people’s pockets.
Inflation was 7.5% higher in January 2022 than in 2021, with more than $20 billion circulating in the economy.
Robinson believes the stimulus bills and recovery acts were necessary to prevent economic downfall but explained with more money to spend on the same goods and services, prices went up.
“The trade-off is we have placed ourselves at risk for this inflation that we are now seeing,” Robinson said. “Now, the Fed has to pull the reins back a little bit. But they have to do so very slowly because if they do this too quickly, they could actually cause a recession.”
Robinson said unemployment during the pandemic measured 14%, though he added it was realistically closer to 17% -- near numbers that could be considered a “depression.”
The UAB professor expects it to take at least a year before things go back to increasing at a normal rate.
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