Fact Sheets Macroeconomic Analysis

How the Build Back Better Act Would Alleviate Inflation and Drive Sustained Prosperity

September 28, 2021

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While the COVID-19 pandemic disrupted the economy in ways never before seen, the extraordinary stimulus measures of the American Rescue Plan successfully minimized the recession and facilitated a faster recovery. The American people have experienced some bumps along the recovery path, however, including unemployment for some groups and price increases for others.


These experiences point to the need for more federal investment in the economy’s infrastructure, from roads and bridges to childcare—investment that would both alleviate inflationary pressures and create millions of jobs.

As policymakers continue to negotiate the scale and structure of the Build Back Better Act, they should remember these three facts:

  • Most of today’s price changes are temporary and sector-specific—driven by mismatches between supply and demand.
  • The Build Back Better Act invests public funding in long-standing, specific supply chain bottlenecks and market failures and would, therefore, relieve inflationary pressures.
  • The Build Back Better Act would set us on a trajectory of sustained economic prosperity and move us closer to full employment.

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