Davidson Economist Predicts Inflation Reduction Act Will Have Small Effect On Inflation

In an interview, Davidson College Economics Professor, Vikram Kumar, was asked if he thought the Inflation Reduction Act would help control inflation.

“Unfortunately, I don’t,” Kumar replied. “It’s a terribly misnamed piece of legislation that is probably better called the Inflation Irrelevance Act! The Congressional Budget Office has done some scoring and they basically said that the rate of inflation is going to be changed imperceptibly —like one 10th of a percentage point, down or up. 

I think the bill will have its biggest impacts in the long run through its subsidies and tax credits for renewables, carbon capture and other climate goals as well as ACA subsidies. But its effect on inflation will be small.”

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