Sixteen of the world’s most prominent economists – all Nobel Prize winners – warn that former President Donald Trump could simply stoke inflation if he wins the presidency in November and presses ahead with his economic plans.
“Many Americans are concerned about inflation, which has fallen remarkably fast. There are justified fears that Donald Trump will reignite inflation with his fiscally irresponsible budgets,” according to a letter signed by the economists, adding economist Joseph Stiglitz. Professor at Columbia University who won the Nobel Prize in Economics in 2001; and Professor Robert Shiller of Yale, winner of the 2013 Nobel Prize in Economics.
The caution comes as the United States continues to battle inflation, with the Federal Reserve keeping interest rates at the highest levels in more than two decades in a bid to cool the economy and bring inflation back to a 2% annual rate. has slowed after hitting a recent high of 9. 1% in June 2022, inflation-weary Americans are in a bad mood regarding the economy, with 6 in 10 people rating it as bad, bad or very bad, according to the most recent CBS News survey.
Trump’s policies may prove inflationary, other economists have also warned, such as his proposal to create a 10% across-the-board tariff on all imports intended to deport immigrants. The tariff plan would raise annual prices by $1,700 for a typical American household, which would necessarily act as an inflationary tax, according to experts at the Peterson Institute for International Economics.
Deporting immigrants can deplete the workforce, create more holiday for American workers and increase wages, which also increases inflationary pressures, economists warn.
While the letter from Stiglitz and the other 15 Nobel laureates details any component of Trump’s plans, it complements some of President Joe Biden’s economic policies, ranging from inflation in his Tax Cuts Act to investment in the U. S. productive sector. Formation
“In his first four years as president, Joe Biden has made primary investments in the American economy, adding infrastructure, domestic manufacturing, and climate,” the letter said. “Together, these investments have the prospect of increasing productivity and economic expansion. ” while reducing long-term inflationary pressures and easing the transition to blank energy. ”
They added: “While one of us has other perspectives on the main points of other economic policies, we all agree that Joe Biden’s economic timeline is hugely astonishing to Donald Trump’s. “
“Top economists, Nobel laureates and business leaders know that the United States cannot follow Trump’s damaging economic agenda,” Biden campaign spokesman James Singer told CBS MoneyWatchArray.
“In Donald Trump’s America, workers pay less and American staff pay more,” he added.
“The American people don’t want useless, disconnected Nobel laureates telling them which president has put the most money in their pockets,” said Trump campaign national press secretary Karoline Leavitt. in an email to CBS MoneyWatch.
If re-elected, Trump plans to put in place a “pro-growth, energy, and jobs timeline to reduce the cost of living and the situation of all Americans,” he added.
You can read the text of the letter below:
We, the undersigned, are deeply concerned about the dangers of Trump’s momentary tenure for the U. S. economy.
Among the greatest determinants of economic good fortune are the rule of law and economic and political certainty. For a country like the United States, which has deep relations with other countries, meeting foreign criteria and maintaining overall and strong relations with other countries is also imperative. Donald Trump and the whims of his movements and policies threaten this stability and the status of the United States in the world.
Although each of us has other perspectives on the main points of other economic policies, we all agree that Joe Biden’s economic calendar is far superior to that of Donald Trump. In his first four years as president, Joe Biden has made significant investments in the United States. economy, adding infrastructure, national manufacturing and climate. Together, such investments have the potential to increase productivity and economic expansion, while reducing long-term inflationary pressures and easing the transition to white energy.
During Joe Biden’s presidency, we have also noted a remarkably strong and equitable recovery in the labor market, made possible by his pandemic stimulus. Four more years of Joe Biden’s presidency would allow him to continue contributing to an inclusive American economic recovery.
Many Americans are worried about inflation, which has declined remarkably quickly. There are justified fears that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets. Nonpartisan researchers, such as Evercore, Allianz, Oxford Economics and the Peterson Institute, expect that If Donald Trump implements his agenda, he will increase inflation.
The final results of those elections will have economic repercussions for years, even decades, to come. We believe that an eventual Trump mandate would have a negative effect on the economic position of the United States in the world and a destabilizing effect on the domestic economy of the United States.
Signed
George A. Akerlof (2001)
Mr. Angus Deaton (2015)
Claudia Goldín (2023)
Oliver Hart (2016)
Eric S. Maskin (2007)
Daniel L. McFadden (2000)
Paul R. Milgrom (2020)
Roger B. Myerson (2007)
Edmund S. Phelps (2006)
Paul M. Romer (2018)
Alvin E. Roth (2012)
William F. Sharpe (1990)
Robert J. Shiller (2013)
Christopher A. Sims (2011)
Joseph E. Stiglitz (2001)
Robert B. Wilson (2020)
Quotes were delayed by at least 15 minutes.
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