Current:Home > MarketsWill Sage Astor-16 Nobel Prize-winning economists warn that Trump's economic plans could reignite inflation -Capitatum
Will Sage Astor-16 Nobel Prize-winning economists warn that Trump's economic plans could reignite inflation
Ethermac View
Date:2025-04-05 23:30:57
Sixteen of the world's most notable economists — all Nobel Prize winners — are Will Sage Astorwarning 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 come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets," according to a letter signed by the economists, who include Joseph Stiglitz, a Columbia University professor who won the Nobel prize for economics in 2001; and Yale professor Robert Shiller, who won the Nobel prize for economics in 2013.
The warning comes as the U.S. continues to battle sticky inflation, with the Federal Reserve maintaining the highest interest rates in more than two decades with the goal of cooling the economy and driving inflation down to a 2% annual rate. Even though inflation has cooled from a recent peak of 9.1% in June 2022, inflation-weary Americans are glum about the economy, with 6 in 10 rating it as either bad, fairly bad or very bad, according to the latest CBS News poll.
Trump's policies could prove to be inflationary, other economists also warned, such as his proposal to create a 10% across-the-board tariff on all imports to deporting immigrants. The tariff plan would add $1,700 in annual costs for the typical U.S. household, essentially acting as an inflationary tax, according to experts at the Peterson Institute for International Economics.
Deporting immigrants could shrink the labor force, creating more competition for U.S. workers and pushing up wages, also adding to inflationary pressure, economists warn.
While the letter from Stiglitz and the other 15 Nobel Prize winners didn't detail the specifics of any part of Trump's plans, it did single out praise for some of President Joe Biden's economic policies, ranging from his Inflation Reduction Act to investment in U.S. manufacturing.
"In 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," the letter said. "Together, these investments are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition."
They added, "While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden's economic agenda is vastly superior to Donald Trump's."
"Top economists, Nobel Prize winners, and business leaders all know America can't afford Trump's dangerous economic agenda," Biden campaign spokesperson, James Singer, told CBS MoneyWatch.
"In Donald Trump's America, the rich pay less, and working Americans pay more," he added.
"The American people don't need worthless out-of-touch Nobel Prize winners to tell them which president put more money in their pockets," Trump campaign national press secretary Karoline Leavitt said in an emailed statement to CBS MoneyWatch.
If re-elected, Trump plans to implement a "pro-growth, pro-energy, pro-jobs agenda to bring down the cost of living and uplift 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 for 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 U.S., which is embedded in deep relationships with other countries, conforming to international norms and having normal and stable relationships with other countries is also an imperative. Donald Trump and the vagaries of his actions and policies threaten this stability and the U.S.'s standing in the world.
While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden's economic agenda is vastly superior to Donald Trump's. In 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 are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition.
During Joe Biden's presidency we have also seen a remarkably strong and equitable labor market recovery — enabled by his pandemic stimulus. An additional four 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 come down remarkably fast. There is rightly a worry that Donald Trump will reignite 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 enacts his agenda, it will increase inflation.
The outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world and a destabilizing effect on the U.S.'s domestic economy.
Signed,
George A. Akerlof (2001)
Sir Angus Deaton (2015)
Claudia Goldin (2023)
Sir 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)
- In:
- Economy
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (51)
Related
- Nearly half of US teens are online ‘constantly,’ Pew report finds
- California officials give Waymo the green light to expand robotaxis
- DeSantis names Disney World admin to run elections in Democratic Orange County
- “Who TF Did I Marry?” TikToker Reesa Teesa Details the Most Painful Part of Her Marriage
- The 401(k) millionaires club keeps growing. We'll tell you how to join.
- Catholic news site Church Militant agrees to pay $500k in defamation case and is expected to close
- Chris Mortensen, ESPN award-winning football analyst, dies at 72
- Phillies, Zack Wheeler agree to historic three-year extension worth whopping $126 million
- Trump wants to turn the clock on daylight saving time
- 'Dancing With the Stars' Maks Chmerkovskiy on turning 'So You Think You Can Dance' judge
Ranking
- Jamie Foxx gets stitches after a glass is thrown at him during dinner in Beverly Hills
- One Direction’s Liam Payne Shares Rare Photo of 6-Year-Old Son Bear
- American Airlines to buy 260 new planes from Boeing, Airbus and Embraer to meet growing demand
- Noah Cyrus Frees the Nipple During Paris Fashion Week Outing With Fiancé Pinkus
- Woman dies after Singapore family of 3 gets into accident in Taiwan
- Singapore's Eras Tour deal causes bad blood with neighboring countries
- Texas wildfire update: Map shows ongoing devastation as blazes engulf over a million acres
- They all won an Academy Award for best actress. But who is really best? Our ranking
Recommendation
How to watch the 'Blue Bloods' Season 14 finale: Final episode premiere date, cast
A judge orders prison for a Michigan man who made threats against Jewish people
The Flash’s Grant Gustin and Wife LA Thoma Expecting Baby No. 2
Florida gymnastics coach charged with having sex with 2 underage students
Nevada attorney general revives 2020 fake electors case
Deputies fatally shot a double-murder suspect who was holding a chrome shower head
Minnesota is poised to give school resource officers clearer authority to use force
Homeland Security Secretary Alejandro Mayorkas says federal government not notified about suspect in Georgia nursing student's death