I'll add my two-cents. I am not an economist but I think I understand something about how systems work. Usually, I would disregard the excuse of conventional economist about exogenous shocks being beyoind the scope of the assumptions of their modeling to handle. But here we see a classic case of an exogenous shock, a global pandemic, leading to uncertainty. No economist would claim to be able to model the progress or outcomes of such a situation.
The very simple, perhaps simplistic answer to all the concern about "rampant inflation" is that exogenous shocks typically involve disruptions of supply. Well, given the equation (identity, actually) of exchange, MV ≡ PQ, if Q (supply measured by the volume of transactions) declines, then P (the price level) will rise, other factors held constant.
Well, there were both supply chain disruptions and a decline in the available labor force owing to the pandemic, is still in the process of clearing, with the time frame still uncertain. This is a condition affecting the global economy, and so blaming "rampant inflation" on ramped-up US government spending is clearly inapplicable under these circumstances.
The reality in the US is that emergency measure were deemed necessary politically and funds were supplied to address such needs. So there was both an expansion in effective demand and a decline in supply provisioning, including issues with energy supply that are being influenced by "greening" in the face of climate change independently of the pandemic. So some prices rose rather suddenly when a recovery began, as would be expected.
The question is how well the authorities managed the actual economy under emergency conditions rather than concern about the nominal effect of emergency measures that are meant to be temporary but must last as long as the emergency does. Given the response by the US during WWII, there were many tools in the toolbox that remained unused, e.g., price controls and rationing vital resources.
I'll let Brian take over from here.
Bond EconomicsMMT Wrangling Back...
Brian Romanchuk
On inflation, we can learn from the mistakes of the past — or repeat them
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