Stimulus policy could over-stimulate the economy with vaccination – Andy Haldane

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Andy Haldane, chief economist at the Bank of England (BoE), said on Friday that el high degree of uncertainty about inflation (in any direction) it’s understandable, as reported by Reuters.

Agrego Haldane that if economies recover as the vaccination program is implemented, the stimulus they are currently receiving from different policies could overstimulate the economy and with it, inflation.

“Disinflationary trends of reasonable probability could persist and indeed be amplified by the COVID crisis, posing risks of downward inflation,” the BoE official said. He explained that there are few, if any, historical precedents to help judge the economy’s response to this scale of shock and stimulus.

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