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Quantifying the Inflationary Impact of Fiscal Stimulus under Supply Constraints
This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify thecontribution of fiscal policy to U.S. inflation over the December 2019-June 2022 period. Modelcalibrations show that aggregate demand shocks explain roughly two-thirds of total model-basedinflation, and that the fiscal stimulus contributed half or more of the total aggregate demand effect.