This all started, as far as I can remember, with the government throwing money at an ailing economy closed down as a result of COVID19.
What hasn't happened is the monetarist prediction that this will cause inflation, and then the monetarists go into meltdown.
One of the issues with economic theory is that the real world provides a context which cannot be ignored. The context of the government throwing money at the economy was that demand was collapsing as incomes were disappearing. Hence, no inflation. In a different context inflation may happen. Theoretical rigidity which ignores context is one of the problems economists seem to have.
Brodders, if you ask 5 economists that question, you will get 10 answers. It all depends on many factors and also on which factors the economists focus on, which is often related to which school of economic theory they subscribe to.
I'll give you an example. You hear a lot of economists say that progressive taxation does not help with inequality, these are generally the economists who subscribe to the trickle down theory. Other economists will state that progressive taxes will help with inequality. Personally, I just trust the facts: after WWII taxation in many countries was made very progressive, rates above 70% to over 90% in many countries including the USA, UK, Japan, Germany, France. These taxes were not only on income but also on large inheritances (generally only on the top 1% or thereabouts). Income inequality dropped: the top 10% of income earners dropped from around 40-45% of income share in 1940 to 25-35% by 1980. Wealth inequality also dropped from the top 10% owning 75% of capital in 1940 to a 50% share by 1980. There are a lot of factors at play but it is noticeable that since 1980 taxation has become less progressive and there has been a rise in both income and wealth inequality, almost back to the levels of 1940.
Theory in economics is generally nicely self contained, reality is far messier and far more difficult to explain, let alone predict. However, observation and hard data does help. Raising taxes on the wealthy and reducing them on the poor, then using the taxes to fund services which provide more benefit to the less well off, would, on the evidence of the post war period, tend to reduce inequality.
DS