Date of Thesis

Spring 2023


The COVID-19 pandemic led to a global shutdown of the economy resulting from both demand and supply shocks. Also, the significant decline in output and employment in the immediate aftermath of the pandemic led to a fast reaction from the government in the form of large fiscal rescue packages. At the end of 2021, the acceleration of inflation, which had been dormant for more than four decades, became the main topic of macroeconomic debates. The debate has revolved around the influence of cost-push versus demand-pull causes of inflation. The dominant view in the United States has been that inflation resulted from excess demand and an overreaction of the Federal Reserve and the Treasury in stimulating the economy. Accordingly, the Federal Reserve has continued to fight inflation by employing tight monetary policy and raising interest rates to reduce demand. However, inflation has persisted, and it seems that monetary tightening might not be an adequate solution, as it appears we are not at full employment nor full capacity utilization. Therefore, inflation is not the result of excess demand. The persistence of inflation seems to be resulting from the continuing supply-side problems and shutdowns that disrupted global trade.


Inflation, Pandemic, Heterodox, Cost-Push, Demand-Pull

Access Type

Honors Thesis

Degree Type

Bachelor of Arts



Second Major


Minor, Emphasis, or Concentration

Public Policy

First Advisor

Matias Vernengo

Second Advisor

Erdogan Bakir

Third Advisor

Kate Suslava