The stimulus could add around 3 percentage points to US GDP growth this year and 1 percentage point to global GDP growth, including spillovers from trade. However, results also support the idea that the size of the fiscal stimulus could lead to an increase in inflation and inflation expectations.
Key learning objectives:
What will the effect of the American Rescue Plan have on inflation?
What are the financial spillovers to emerging markets?
What are the financial spillover impacts of the American Rescue Plan around the world?