If repeated shocks the size of the COVID shock were to occur, the US would eventually run into inflation problems as the fiscal adjustment capacity is exhausted; the current favorable outcome is partly a result of being able to absorb a large one-time shock, but repeated shocks would overwhelm the system
forecastpending
Speaker
Peter StellaEvidence Quote
“but if a country were to have repeated shocks the size of covet you know that's that's when you then you would run into this”
Source
Debt Death Spirals, Fed's Losses, & Fiscal Theory Of Price Level | Peter Stella & Joseph Wang— Forward GuidanceCreated: 8/10/2026, 10:58:24 PM
My Notes
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