Pre-registration
The 2020-2021 US fiscal response (CARES + ARP, roughly $5tn) produced a transient inflation episode that receded by 2023-2024 as supply-side capacity normalised, consistent with MMT's real-constraint view.
Falsification criterion — what would disprove this
This hypothesis is considered falsified if:
Primary descriptive test computes year-over-year inflation for headline CPI, core CPI, headline PCE, and core PCE. Baseline is each series' 2018-2019 mean year-over-year rate. The transient-by-2024-Q1 claim is supported if at least three of the four Q1-2024 means are within +1.0 percentage point of their baseline and no core measure is more than +1.5pp above baseline. It is refuted if fewer than two of four measures are within +1.0pp of baseline or if both core CPI and core PCE remain more than +1.5pp above baseline. Otherwise it is weakened.
formal test & threshold
test: fred_cpi_pce_return_to_baseline_2024q1 threshold: support if >=3/4 within +1pp and no core >+1.5pp; refute if <2/4 within +1pp or both core >+1.5pp
Method
- Template
local_projections- Clustering
episode- Sample
- 1 countries · 2018 – 2024
- Evidence type
- associational
Stub-level estimator pin for runnability audit. Local-projection IRFs of US headline and core CPI to fiscal-impulse shocks (CARES, ARP) at h = 1..36 months, with supply-side capacity proxies (port congestion, semiconductor production index) interacted as state variables. Tests whether IRFs return to pre-shock baseline by 2023-2024. Falsification rule and variables block remain to be filled when this stub is promoted from draft.
Data
| Variable | Source | Transform |
|---|---|---|
cpi_inflation outcome | fred:CPIAUCSLtier 1 | pct_change_yoy |
cpi_core_inflation outcome | fred:CPILFESLtier 1 | pct_change_yoy |
pce_inflation outcome | fred:PCEPItier 1 | pct_change_yoy |
cares_act_event treatment | constructed:event date = 2020-03-27 (CARES Act); ~$2.2tn fiscal impulsetier 5 | event_date |
arp_event treatment | constructed:event date = 2021-03-11 (American Rescue Plan); ~$1.9tn fiscal impulsetier 5 | event_date |
federal_outlays_pct_gdp treatment | fred:FYONGDA188Stier 1 | level |
supply_chain_pressure_index control | fred:T5YIFRtier 1 | level |
oil_price control | imf_pcps:POILBREtier 1 fred:WTISPLCtier 1 | log_diff |
fed_funds_rate control | fred:DFFtier 1 | level |
unemployment_rate control | fred:UNRATEtier 1 | level_pct |
● ready · ● pending · ● reconstruct-needed
Detailed result card
us_2020_2021_fiscal_inflation_transient_vs_persistent
Verdict: refuted — fewer than two of four inflation measures returned within +1pp of baseline by 2024-Q1 (0/4).
Registered Metrics
- headline_cpi: baseline 2.13%, 2024-Q1 3.24%, gap +1.12pp, within_1pp=False.
- core_cpi: baseline 2.17%, 2024-Q1 3.81%, gap +1.64pp, within_1pp=False.
- headline_pce: baseline 1.74%, 2024-Q1 2.78%, gap +1.04pp, within_1pp=False.
- core_pce: baseline 1.77%, 2024-Q1 3.11%, gap +1.34pp, within_1pp=False.
Method Note
This test checks return-to-baseline timing only; it does not identify the fiscal impulse's causal share.
Strongest opposing argument
Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.
Notes
Origin is auto-generated coverage-gap stub seeded from MMT framing of the 2020-2021 US fiscal response as producing a transient inflation episode that recedes as supply-side normalises. v2 pins a descriptive return-to-baseline test using local FRED CPI/PCE vintages.