Sixteen Nobel Prize-winning economists signed a joint letter on Tuesday (25th), warning that if former President Trump is re-elected, it will pose economic risks and could lead to a resurgence of inflation.
According to reports from English-language media, the letter stated: “While each of us has different views on the details of various economic policies, we all agree that Biden’s economic agenda is far superior to Trump’s.”
The scholars wrote: “There is reason to worry that Trump’s irresponsible fiscal budget will once again drive up inflation.”
So far, Trump’s proposed economic agenda includes making the tax cuts from his first term permanent, imposing a universal tariff on all imported goods, maintaining tariff rates on Chinese goods between 60% and 100%, and pressuring the Federal Reserve to cut interest rates.
Economists and Wall Street analysts predict that any or all of the aforementioned measures could lead to a resurgence of price increases. Despite prices showing slight cooling in recent months, they remain in a fragile state.
Joseph Stiglitz, the 2001 Nobel Prize winner in Economics, is the lead author of this joint letter.
The economists wrote, “Non-partisan researchers, including Evercore, Allianz, Oxford Economics, and the Peterson Institute, predict that if Trump successfully implements his economic agenda, it will exacerbate inflation.”
Stiglitz stated that he felt compelled to write the letter because recent polls show that voters trust Trump more than Biden to manage the U.S. economy.
He said, “Many people believe that Trump handles the economy better than Biden. I think it’s important for Americans to know that at least a group of economists completely disagrees with that view.”
The timing of the letter’s release is also noteworthy, as Trump and Biden are set to hold their first presidential debate in a few days, where they will extensively discuss economic issues, particularly inflation.
Trump’s campaign team strongly opposed the economists’ stance, with spokesperson Karoline Leavitt stating, “The American people do not need out-of-touch Nobel laureates to tell them who can bring them more economic income.”
Biden’s campaign team seized the opportunity to promote their position: “Top economists, Nobel laureates, and business leaders all know that the American people cannot afford Trump’s dangerous economic agenda.”
Many of these economists signed a similar open letter in September 2021, expressing support for President Biden’s “Build Back Better” plan. At that time, critics argued that the plan would drive up inflation.
Chronic inflation puts heavy economic pressure on the American people. Nearly half of Americans believe recent inflation has made their lives more difficult, according to a latest poll. The US media believes that inflation may continue to outpace wage growth in the next few years.
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