The Adverse Effects of the Stimulus Checks

Sambhav Jain

The stimulus checks have had some controversial side effects such as increasing inflation. Investors are worried about the current monetary policy since they feel that the monetary policy won’t be able to account for the incredible spikes in the prices of goods. This spike in prices of goods will be a result of consumer demand going back to pre-pandemic levels when the economy fully reopens. Inflation is difficult to calculate since inflation is national and is a gradual process rather than single independent events in the economy. One index for inflation is the CPI which is consumer price inflation that measures how certain groups of goods and services are having their prices change over time. The CPI showed that in March a 0.5% increase in inflation will occur which can be expected to increase even more drastically when the economy is opened. This increase was expected due to the increased dependency in the economy as a result of the stimulus checks therefore in order to improve the economy the stimulus checks should be curbed back.