Sixteen of the world’s most prominent economists – all Nobel laureates – are warning that former President Donald Trump could stoke inflation if he wins the presidency in November and moves forward with his economic plans.
“Many Americans are concerned about inflation, which has fallen remarkably quickly. There are justifiable fears that Donald Trump will reignite that inflation, with his fiscally irresponsible budgets,” according to a letter signed by the economists, including Joseph Stiglitz, a economist. 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 warning comes as the United States continues to battle stubborn inflation, with the Federal Reserve maintaining the highest interest rates in more than two decades in an effort to cool the economy and bring inflation back to a low. annual rate of 2%. Even though inflation has calmed after hitting a recent high of 9.1% in June 2022, inflation-weary Americans are gloomy about the economy, with 6 in 10 rating it bad, pretty bad or very bad, according to the latest CBS News poll.
Trump’s policies could prove inflationary, other economists have also warned, such as his proposal to create a blanket 10% tariff on all imports intended to deport immigrants. The tariff plan would add $1,700 in annual costs for the typical American household, essentially acting as an inflationary tax, according to to experts from the Peterson Institute for International Economics.
Expelling immigrants could shrink the workforce, creating more competition for American workers and pushing up wages, also adding to inflationary pressure, economists warn.
Although the letter from Stiglitz and the 15 other Nobel laureates does not detail any part of Trump’s plans, it does praise some of President Joe Biden’s economic policies, ranging from his Tax Reduction Act inflation to investment in the American manufacturing sector. .
“In his first four years as president, Joe Biden signed into law major investments in the American economy, including in infrastructure, domestic manufacturing, and climate,” the letter said. “Together, these investments have the potential to increase productivity and economic growth while reducing long-term inflationary pressures and facilitating the transition to clean energy.”
They added: “While each of us has different views on the details of different economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s.”
“Top economists, Nobel laureates and business leaders all know that America cannot afford Trump’s dangerous economic agenda,” Biden campaign spokesman James Singer told CBS MoneyWatch. “In Donald Trump’s America, the rich pay less and American workers pay more.”
In an emailed statement to CBS MoneyWatch, Trump campaign national press secretary Karoline Leavitt said, “The American people don’t need worthless, out-of-touch Nobel Prize winners telling them which president put the most money in his pockets. »
If re-elected, Trump plans to implement a “pro-growth, pro-energy and pro-jobs” agenda to lower the cost of living and improve the situation for all Americans, she added. .
“We, the undersigned”: Read the letter
You can read the text of the letter below:
We, the undersigned, are deeply concerned about the risks of a second Trump administration to the U.S. economy.
Among the most important determinants of economic success are the rule of law and economic and political certainty. For a country like the United States, which has deep relations with other countries, complying with international norms and maintaining normal and stable relations with other countries is also imperative. Donald Trump and the vagaries of his actions and policies threaten this stability and the position of the United States in the world.
Although each of us has different views on the details of different economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s. During his first four years as president, Joe Biden signed into law major investments in the U.S. economy, including in infrastructure, domestic manufacturing, and climate. Together, these investments have the potential to increase productivity and economic growth while reducing long-term inflationary pressures and facilitating the transition to clean energy.
During Joe Biden’s presidency, we have also seen a remarkably strong and equitable recovery in the labor market, made possible by his pandemic recovery measures. Four more years of Joe Biden’s presidency would allow him to continue supporting an inclusive U.S. economic recovery.
Many Americans are concerned about inflation, which has fallen remarkably quickly. We rightly fear that Donald Trump will revive this inflation, with his fiscally irresponsible budgets. Nonpartisan researchers, including at Evercore, Allianz, Oxford Economics and the Peterson Institute, predict that if Donald Trump successfully implements his agenda, it will increase inflation.
The outcome of these elections will have economic repercussions for years, even decades, to come. We believe that a second Trump term would have a negative impact on the United States’ economic position in the world and a destabilizing effect on the U.S. domestic economy.
Sign,
George A. Akerlof (2001)
Sir Angus Deaton (2015)
Claudia Goldin (2023)
Mister 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)
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