RIVERSIDE, California, November 11, 2021 / PRNewswire / – (www.ucr.edu) – From a demand perspective, the US economy has fully recovered from the pandemic recession. And production, although not yet there, will return to its long-term trend in the near future. That, according to a new forecast published yesterday in the 12e annual Inland Empire Economic Forecast Conference, hosted by UC Riverside School of Business.
The New Perspectives argue that while COVID-19 was a human tragedy, it never created depression like the economic conditions predicted by so many – and fear of these conditions has led to an overly vigorous stimulus response.
According to the new forecast, the current economy has been inflamed by an overly aggressive government response to the pandemic, and it is this incentive that is behind the soaring inflation and supply chain disruptions in the country. ‘today. “What we saw was one of the most formidable levels of economic stimulus ever dreamed of,” said Christophe Thornberg, director of UC Riverside School of Business Center for Economic Forecasting and one of the forecasters. “A lot of public money has created a lot of wealth for the private sector – $ 29 trillion of household wealth in United States to be exact – and it has overheated the economy. “
The effects of this wealth are manifested in the form of high savings rates, excessive consumption, rapidly rising asset markets and booming house prices. Indeed, for every dollar lost during the pandemic, the US government returned three and a half dollars, according to the analysis.
Although forecasts predict continued robust economic conditions in the country, California, and the Inland Empire over the next several years, in the longer term, the excessive federal stimulus will introduce instabilities such as long-term monetary inflation, exacerbate the nation’s long-term fiscal challenges and possibly sow the seeds of the nation’s long-term fiscal challenges. seeds of the next slowdown.
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SOURCE UC Riverside School of Business Center for Economic Forecast and Development