• N. Gregory Mankiw


February 26, 2021, Opinion; "You are driving down a highway you’ve never been on before, eager to get to your destination. You’re in a hurry but also want to avoid a ticket. One problem: You don’t know the speed limit. How hard do you push on the accelerator? That is roughly the question facing the Biden administration and Congress as they debate the size of the next round of fiscal stimulus. They want to reach full employment as soon as possible. But if the economy accelerates too much, they risk a speeding penalty in the form of excessive inflation. One thing a driver might do is recall similar highways she has been on before. If fiscal policymakers do that, some might decide against further stimulus. According to the Committee for a Responsible Federal Budget, the fiscal packages already in place, measured as a percentage of gross domestic product, are about a quarter larger than those enacted during the Great Recession of 2008. And they are being carried out much faster."

Non-HKS Author Website - N. Gregory Mankiw