An intense debate has erupted over whether the unprecedented size of the US fiscal stimulus will cause the US economy to overheat and generate high inflation. Lawrence H. Summers and Olivier J. Blanchard, in particular, have warned of the adverse inflationary implications of the recently enacted American Rescue Plan. However, some economists, notably Paul Krugman, argue that overheating due to fiscal expansion is far from certain, while others, including Joseph E. Gagnon, believe that even if the stimulus did overheat the economy, the resultant surge in inflation would be temporary. Policymakers, too, are unconvinced that persistently high inflation is a risk. Treasury Secretary Janet L. Yellen has  repeatedly dismissed inflationary concerns; she recently stated that she expects any price increases in the near term to be transitory. This view is shared by Federal Reserve Chair Jerome H. Powell, who sees one-time price increases—stemming largely from “base effects,”1 energy price increases, and supply-chain bottlenecks—as having no lasting effects on inflation.