Consumer prices in the United States rose at an annualized rate of 7.7 percent in October, the ninth straight month above seven percent, thanks to still surging demand and stumbling supply. All eyes are fixed on the U.S. Federal Reserve to cool demand by hiking interest rates. But monetary policy has always worked with long and variable lags, which makes the Fed’s job of trying to shape the decisions of the country’s 122.4 million households, 164.5 million workers, and 35.1 million businesses even more daunting.
There is something else that U.S. policymakers could do to battle inflation, however. They could expand immigration for both skilled and less skilled workers to boost the supply capacity of the U.S. economy. More immigration would help meet today’s excess demand for labor, which over time would limit wage and price growth. In October, there were an astonishing 10.3 million job openings in the United States, 4.3…
