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@pkrugman.bsky.social recently said that the "good old days" of low prices should be fading away—and he's right. The problem is, it'll take many years. New (and my first piece at Strength In Numbers!) w/@gelliottmorris.com: Why consumer sentiment won't recover until the 2030s w/o bold new policies.

Elliott (and @jaredb-econ.bsky.social) have persuasively argued that "excess inflation"—how much more things cost vs. what consumers think they *should* cost, based on 30 years of low inflation before COVID—is making Americans very sour on the economy. Prices are now about 15% higher than expected!

But we can project when this excess inflation will disappear, based on estimates of future inflation. Current predictions range from 2.7% to 4.7% per year, which means excess inflation would not vanish until 2029 or 2030—and that's only if are no future COVID-style spikes.

But in many scenarios, consumer sentiment lags further still. Under 3% annual inflation, for instance, attitudes about the economy wouldn't return to their historical median until 2032. And crucially, they would *never* reach their pre-COVID highs again. Unless.