(Investing.com) With the crisis caused by the Covid-19 pandemic, countries adopted a series of economic measures to face the situation, which caused an inflationary process. In the case of the United States, the unprecedented injection of resources and an expansionary monetary policy also raise concerns about price indicators.
But, in the opinion of Ben Bernanke, who was president of the Fed between 2006 and 2014, the price is higher than expected, but it is transitory and should remain moderate next year. Bernanke participated last Wednesday in the panel “The global economy in the post-pandemia: Stimulus reversal and inflationary risk”, held during the Expert XP virtual event.
For the former Fed chairman, monetary and fiscal policies were strong and correct in the face of the crisis. “If you look at the growth projections for the United States in June 2020 and you look at the growth that took place in six months to a year, we did much better than economists were expecting and I think fiscal and monetary policies to helping the economy were an important reason for that”, he says.
Bernanke said the problem would be greater if inflation expectations were unanchored, which he believes is not. “So until we see inflation expectations rise significantly, I will continue with the story that difficulties in supply chains will be transitory.”
The reopening of the economy with vaccination, the slowdown in prices in commodity categories and the resolution of problems in production chains tend to motivate the fall in inflation next year, according to him. It still needs time to resolve the “mismatch” caused by the pandemic.
“A lot of people are rethinking their careers, their lives, there are more people working from home, there are a lot of changes in the economy. It will take a while for everything to adjust”, he explains
