CAMBRIDGE, MASSACHUSETTS -

The Yuan: Last July, you wrote that economists and investors were right to be apprehensive about deficit spending, public debt, and the risk of sustained price growth, but that “it would be a mistake to respond to these concerns by pumping the brakes on the economy.” The United States’ inflation has now reached its highest level in decades, and the US Federal Reserve is taking increasingly aggressive action to rein it in. Is the Fed doing enough? How concerned are you that sharp tightening will stifle the economic recovery, especially given the additional inflationary pressures stemming from the war in Ukraine?

Daron Acemoglu: Well, I am concerned. It’s hard not to be. What I emphasized last July was that high inflation and deficit spending carry significant risks, but not trying to save US democracy carries even larger ones. What is happening now is the worst of both worlds: inflation rates are very high, and democracy is in even more trouble now than it was then.

Six months before the US midterm elections, it seems incontrovertible that the Republican Party has become the party of Donald Trump, whose explicit support has practically become a prerequisite for GOP candidacy. To many well-educated, left-leaning Americans, this is still incomprehensible - and that, I suspect, is an important part of the problem. To safeguard US democracy from Trumpism, one must first understand why people are drawn to it.

Rather than label Trump supporters misguided or even ‘deplorable’ - an approach that merely deepens the schism in American society - one must recognize that a very large share of the Americans who have not benefited from economic growth and who have felt cast aside, both economically and so