Supply shocks Vs demand shocks ft. David Beckworth

Added: 2026-05-19

[00:00:00]So, if you accept that central bank standard view, look through supply shocks, the challenge is how do we know in real time what is inflation caused by a supply shock or a demand shock? And we don't. We might have a sense, but it's really hard to know. I mean, go back to '21, '22, right? There's the the debate, is this supply driven, is it transitory, or is this too much fiscal stimulus? And you're trying to thread that needle.

[00:00:21]Let's It's difficult, and it's it's impossible. Unless you're God, you don't know what's driving it. Acknowledge that we don't know much about the economy real time, and just aim on stabilizing total spending or aggregate demand.