Economics used to offer lots of metrics that claimed to show when growing economies were approaching some kind of speed limit. But increasingly, inflation is the only one that’s taken seriously.
Stripped down to basics, the new consensus in economics goes like this: It’s fine for governments to borrow and spend more money -- so long as they can get hold of it cheaply.
Joe Biden’s administration has dedicated its first few weeks in office to spending more money on pandemic relief -- and shrugged off warnings that the economy may overheat as a result.
They’re still in the minority, but investors and economists who think America is in for a bout of inflation -- perhaps a serious one -- start the year with some fresh ammunition for their arguments.
Much will depend on how fast businesses bring back jobs.
With government spending helping to steer countries through the pandemic, it may not be easy to turn off the taps afterward.
They are gaining support in Congress and among economists as the scale of the coronavirus shock has become much clearer.