Does Unconventional Monetary and Fiscal Policy Contribute to the COVID Inflation Surge?

We investigate whether unconventional monetary and fiscal policy enacted in response to the COVID-19 pandemic contributed to the 2021–2023 inflation surge. Through the lens of multiple complementary empirical strategies, including event studies, vector autoregressions, and regional panel regressions, we establish a null result across all approaches. Our findings challenge the popular view in the media that pandemic-era stimulus caused recent inflation. The key economic mechanism operates through a disinflationary supply-side channel in the Phillips curve, which offsets the upward pressure on inflation from the usual demand channel. We demonstrate this mechanism both theoretically and empirically.