The article discusses how inflation acts as a consumption tax, harming poorer populations the most due to their higher spending. It highlights concerns over Donald Trump's tariffs, which will likely exacerbate inflation once the current pause expires. The piece goes on to explore various narratives surrounding inflation, categorizing them into supply and demand-driven perspectives. It suggests that even if tariffs were lifted, stable prices would not return, revealing deeper insights about public perception and responses to inflation over time.
"Inflation is a tax on consumption and hits the poor hardest, given that they consume more of their income while the rich consume less."
"When the 90-day pause on Trumpâs tariffs expires, it is reasonable to expect significant price increases, particularly affecting low-income consumers."
"The tariffs of Trump's first administration could be absorbed more easily, but current tariffs are of a magnitude that they must impact both producers and consumers, leading to rising prices."
"Insights from our book suggest that even if Trump's tariffs were removed, price stability would not be restored due to differing public perceptions of inflation causes."
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