The wide-ranging discussion covered market concentration, drivers of growth, investments in human capital, inflation, the long term economic effects of the pandemic, and the pivot to a climate-smart economy.

Chair Rouse made the case for increasing investments in human capital, as well as physical capital, and to invest more in children from the very beginning. “We know that one of the best investments we can make in people is in high-quality pre-care and childcare,” she said. “There are numerous studies which suggest that dollars invested in children pay for themselves multiple times – 5, 6, 7 times over.” Noting that the pandemic has “wreaked havoc on our investments in K through 12” education, she cited estimates by leading economists that learning losses of children during the pandemic could amount to $2 trillion in lost lifetime earnings – concentrated in low-income and minority neighborhoods.

Citing the historical comparison to the years following World War II – where price controls and supply constraints ended as demand boomed – Chair Rouse expressed optimism that as the pandemic moderates, supply-demand mismatches will regulate. “What that tells us is that we will get through this,” she said, acknowledging that one historical lesson is that it may take some time. “As supply and demand moderate, we will get back to healthy rates of inflation.”

Afsaneh and Chair Rouse also discussed accelerating the transition to a climate-smart economy and dealing with disruptions to jobs, especially in legacy industries. “As we pivot and make the transition to clean energy, we are going to have to make that a priority as well,” Chair Rouse said. She also discussed the importance of the US building capabilities at home to supply batteries and other critical climate-smart infrastructure and ensuring that diverse sources of clean energy are produced at home.