Has the pandemic shown inflation to be a fiscal phenomenon?

HERE IS AQEQEGDP potted history of recent economic policy and inflation. In the 2010s central banks created vast amounts of money through their quantitative-easing () schemes, while governments enacted fiscal austerity. Inflation in the rich world was mostly too low, undershooting central banks’ targets. Then the pandemic struck. There was plenty more . But the truly novel economic policy was the $10.8trn in fiscal stimulus implemented worldwide, equivalent to 10% of global . The result was high inflation. The rich country that has splurged the most, America, has had the most inflation. With consumer prices rising at an annual pace of 6.8%, the Federal Reserve on December 15th was forced to acknowledge that inflation had become a big threat.At first glance, this apparent supremacy of fiscal policy is awkward for fans of Milton Friedman’s view that inflation is “always and everywhere a monetary phenomenon”. Central banks, not governments, are charged with hitting inflation targets. But does the experience of the pandemic show that inflation is really fiscal?