Does fighting inflation always lead to recession? What 60 years of NZ data can tell us
There is an ongoing global debate over whether the high inflation seen in the aftermath of the COVID-19 pandemic can be lowered without a recession.
There is an ongoing global debate over whether the high inflation seen in the aftermath of the COVID-19 pandemic can be lowered without a recession.
Economics & Business
Apr 26, 2024
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Climate change, and specifically rising temperatures, may cause food prices to increase by 3.2% per year, according to a new study by researchers in Germany. As climate change continues to worsen, this price inflation will ...
Agriculture
Mar 25, 2024
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Food prices and overall inflation will rise as temperatures climb with climate change, a new study by an environmental scientist and the European Central Bank found.
Environment
Mar 21, 2024
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A concerning trend known as qualification inflation has been plaguing hiring practices for years. Qualification inflation—also known as degree inflation—refers to the growing number of employers requiring degrees and ...
Economics & Business
Jan 20, 2024
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A new Scientific Reports study proposes an extension of the electron Born self-energy (eBse) model, unveiling a mechanism for cosmic inflation driven by a constant potential energy density, thereby challenging the conventional ...
In the very early universe, physics were weird. A process known as inflation, during which the universe went from a single infinitesimal point to everything we see today, was one such instance of those weird physics. Now, ...
Astronomy
Nov 17, 2023
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87
The UK's inflation-fueled cost-of-living crisis is set to "cut lives short" and "significantly widen the wealth-health gap", according to a study published by open access journal BMJ Public Health on Monday.
Social Sciences
Sep 26, 2023
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The universe is big, as Douglas Adams would say.
Astronomy
Sep 11, 2023
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Consumer sentiment lifted 9% in June, reaching its highest level in four months, a sign of greater optimism as inflation eased and policymakers resolved the debt ceiling crisis.
Economics & Business
Jun 30, 2023
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A large team made up of academics and professionals in the private sector from across the U.S. has found that just a year after passage of the Inflation Reduction Act of 2022 (IRA), measurable drops in greenhouse gas emissions ...
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
Inflation's effects on an economy are various and can be simultaneously positive and negative. Negative effects of inflation include a decrease in the real value of money and other monetary items over time, uncertainty over future inflation may discourage investment and savings, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring central banks can adjust nominal interest rates (intended to mitigate recessions), and encouraging investment in non-monetary capital projects.
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.
Today, most mainstream economists favor a low, steady rate of inflation. Low (as opposed to zero or negative) inflation may reduce the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduce the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control the size of the money supply through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.
This text uses material from Wikipedia, licensed under CC BY-SA