from governments and central banks around the world. Russia’s invasion of Ukraine has made the problem worse.
“Forces supporting the global expansion of output in recent decades – which included technological advances, the shift of labour out of agriculture … globalization, and rapid population growth – were strongly disinflationary. As these fade, alongside recent supply shocks, inflationary pressures could build, echoing the experience of the 1970s.”There are similarities between today and the 1970s. In both periods, commodity price shocks came on the heels of expansionary monetary and fiscal policy.
Central banks also have a lot more credibility today than in the 1970s, thanks to three decades of low and stable inflation which started in the 1990s. This has helped keep people’s long-term expectations for future inflation relatively well anchored, despite the current runup in consumer prices.It depends on who you ask. Bank of Canada deputy governor Toni Gravellearguing that Canada is not about to experience a rerun of the 1970s.
At the same time, a period of stagflation does not necessarily mean that the Canadian economy will fall into recession, Mr. Poloz said. He said the central bank may be able to engineer a short period of “technical stagflation” where growth slows a moderate amount, not “the kind roaring stagflation like we had in the seventies.”Stagflation does not necessarily involve a recession - two quarters of negative economic growth.
If inflation remains high, however, central banks are expected to keep pushing interest rates higher. The Bank of Canada hasthat it may need to raise its benchmark interest rate to 3 per cent or above if inflation does not start coming down. That’s up from 1.5 per cent today.
Didn’t the media tell us not to long ago that this was transitory. Didn’t they just tell us everything is going to be ok.
You lie as you can't even understand or explain economic theory. Dialectical materialists.
I thought raising interest rates was how to reduce inflation , so saying they are both bad seems like someone doesn’t understand economics