https://www.commonsense.news/p/larry-summers-on-inflation-and-the

It had been 40 years since we’d had inflation. Most people’s lived experiences didn’t include a major acceleration in inflation. I would also put some emphasis on bad statistical modeling. I think there was a factor of motivated belief. People wanted to avoid the mistakes of the slow recovery after 2010. They wanted to believe that they could engage in substantial expansionary policies.

*Inflation Reduction Act*

I don’t think its principal effect is going to be reducing inflation.

I think the Wharton study you quoted substantially underestimates the revenue gains from increased tax enforcement in the bill. It also doesn’t take any account of the non-macroeconomic factors—the superior purchasing of prescription drugs and the increased availability of low-cost energy.

*Recession*

I don’t think we have seen that yet. I expect that sometime in the next two years, we will because of the magnitude of the inflation we’ve built up. But no one can be certain.

*Trust to Fed*

I think the Fed has made a number of flawed judgments, particularly during 2021.

Alan Greenspan and Paul Volcker understood what the Delphi Oracles understood, which is that if people think you’re potent and infallible, but actually you’re human, it’s a good idea to keep your prophecies vague and oracular rather than to put your credibility at risk and shatter the illusion. I think the current generation of central bankers has gravitated to overly technocratic, mechanistic, and academic approaches that make the loss of credibility all but inevitable.

*Universal Basic Income*

I worry about UBI increasing the deep social cleavages in our economy between the elite that generates spectacular wealth and everyone else. I’m skeptical of UBI not because I don’t care, but actually because I do, and I want to give people and their children a policy framework that makes for the most meaningful lives possible.