By Isaac Cohen*
Acccording to Princeton University Professor Alan S, Blinder (The Wall Street Journal 04/27/21), at the expected growth rate of 6.4 percent for this year, not seen since 1984, the US economy is already undergoing a “Biden boom.” With massive vaccinations and the consequent unlatching of the pandemic induced pent-up demand, together with wide fiscal and monetary support, President Joseph Biden can claim the paternity of a boom not seen in decades, at the arrival of his first 100 days in office.
The big question is how long the boom can last, because as recognized by Professor Blinder himself and many experts several “worries” appear in the horizon. For instance, epidemiologists are concerned about the “battle” between the virus mutations and the vaccines. Some economists affiliated with the Democratic Party, as Harvard Professor Lawrence Summers, worry about an inflationary flare up, which would lead the central bank to adopt higher interest rates and a tighter posture, ending the spectacular stock market returns of the last decade. Finally, among those who always worry about public debt, there is concern that funding infrastructure spending with higher taxes, as proposed by the White House, will slow down growth.
However, Professor Blinder concludes that “as a whole, the worry list doesn’t seem that worrisome,” therefore he recommends to “enjoy the Biden boom.”
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.