Economist Dr. Loren Scott
November consumer prices jumped 6.8 percent in November compared to a year earlier. That’s the highest annual inflation rate in nearly four decades. LSU economist, Dr. Loren Scott, says fixing the supply chain issues won’t likely do much to erase inflation. “It’s difficult to get cars, it’s difficult to get chips for cars, etcetera and that drives up their prices. You’d think that once that’s fixed, once the supply chain issue is fixed we return to normal,” said Scott. But, Scott says current Federal Reserve policy that’s pumping more money into the system, coupled with the amount of money the federal government is spending likely dashes any hope for a short-term dance with rising inflation.
Scott talks about what he says is the inflationary impact of a very accommodating monetary policy by the Federal Reserve as being a major cause for rising prices. He says, “The Federal Reserve System is just pumping a lot of money into the system right now and that has a tendency to be inflationary especially if the economy is going well as it is right now.”
Scott believes inflation is also a product of supply-and-demand and discounts the possibility of collusion to boost prices and thus stir up the inflationary pot. “I don’t think it’s really possible to have collusion at the scale that would create the inflation we’re experiencing right now,” said Scott
He says the inflation that’s occurring can be blamed for the most part on supply chain issues and monetary and fiscal policy, something that likely won’t be corrected in the short-term, but possibly in the medium term.
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