Two studies have been performed on the correlations between U.S. Federal Deficit Spending and CPI Inflation. The first used federal deficits for fiscal years between 1914 and 2022. The second study used the quarterly data available for federal deficit spending starting in 1966. This article is the second to compare the results of the two studies.
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Two studies have been performed on the correlations between U.S. Federal Deficit Spending and CPI Inflation. The first used federal deficits for fiscal years between 1914 and 2022. The second study used the quarterly data available for federal deficit spending starting in 1966. This article compares the results of the two studies.
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This article concludes the analysis of the correlation patterns between quarterly Federal Deficit Spending (FDS) and Consumer Inflation (CPI). The last of the three types of inflation patterns (time periods with no significant inflation trends) is the subject of analysis here. The other two types of patterns (inflation surges1 and disinflation/deflation surges2) were analyzed previously. The conclusion discusses the correlation patterns for all time periods, looks for any common threads, and identifies important differences across time periods and types of correlation patterns.
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The full data sets for the 56 years from 1966 to 2022 show no discernable association patterns (correlations) for federal deficit spending (FDS) and inflation changes.1 Thus, we started an analysis by looking specifically at the various regimes of inflation change during the 56-year timeline. The most recent post2 analyzed the seven time periods over 56 years with positive inflation surges. This article analyzes the association between CPI changes and FDS changes during the four periods from 1966 to 2022 with negative inflation (disinflation/deflation) surges.
Image by Nicolae Baltatescu from Pixabay.
The full data sets for the 56 years from 1966 to 2022 show no discernable association patterns (correlations) for U.S. federal deficit spending growth and inflation changes.1 This post continues that analysis by looking specifically at the various regimes of inflation change during the 56-year timeline.
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We have found that the correlation relationships between various types of credit and inflation are variable over time. So far, the kinds of credit studied are government spending,1 consumer credit,2 mortgage debt,3 nonfinancial corporate credit,4 and financial sector debt.5 Here, we return to federal deficit spending and inflation by analyzing data organized differently than previously used.
The Treasury Department Building in Washington DC. (Public domain, Wikipedia.)
For the past several months, we have examined what the U.S. data has to say about the relationships between deficit spending by the federal government and inflation, as measured by the Consumer Price Index (CPI). This post will summarize these results and discuss what they mean.
Image by Gerd Altmann from Pixabay
One of the time periods without significant inflation changes is incorrectly specified in Part 15.1 This post corrects that error.
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This is a continuation of the analysis of each significant period of rising inflation since 1914. The first part1 covered the years up to the start of World War II. The second part2 covered the inflationary periods following World War II through 2022. This is an addendum to the second part.
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Previous posts have summarized the correlations for U.S. federal government deficit spending with inflation1 and deflation2 over the years from 1914-2022. In this article, the correlations of deficit spending with inflation are determined for the years not part of significant inflation surges (up or down).
From a photo by Haran Amorim on Unsplash
