inflation

La Ley de Reducción de la Inflación finalmente le dio a los EE. UU. una verdadera política de cambio climático

Mié, 08/16/2023 - 23:53 -- bacosta

La Ley de Reducción de la Inflación (IRA) es un proyecto de ley que fue firmado en ley por el presidente de los Estados Unidos, Joe Biden, el 13 de agosto de 2022. La IRA es una pieza de legislación importante que tiene como objetivo abordar varios problemas, incluyendo la inflación, el cambio climático y la desigualdad.

Algunos críticos argumentan que no va lo suficientemente lejos en abordar el cambio climático o la desigualdad. Otros argumentan que está demasiado enfocada en la política industrial y no hace lo suficiente para abordar otros desafíos que enfrenta la economía estadounidense.

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WHAT AWAITS US IN 2023: Monetary juggling, A dynamic east and climate shocks

Lun, 04/10/2023 - 18:17 -- bacosta

In 2020, the Fed and other G7 central banks cut interest rates and doubled their money supply to combat the economic crisis. By the end of 2021, the dilemma was whether to raise interest rates to fight inflation or leave them low to avoid a further slowdown. In March 2022, the Fed decided to prioritise inflation and began a tight monetary policy. However, in March 2023, inflation in the US and the Eurozone was still high, which meant high-interest rates to combat it.

WHAT HAPPENED IN 2022: THE WORLD FRAGMENTED

Mar, 02/21/2023 - 02:14 -- bacosta

The year 2022 began as one of great uncertainty. A timid economic recovery cooled off in the third quarter of 2021, and the US economy, with its gigantic fiscal deficits, failed to pick up steam. Russia's tensions with Ukraine have grown, and there needs to be a sense of how it can be solved. China has grown steadily, and the Asian countries have performed well, counterbalancing the slowdown in the G7 economies. Inflation rose sharply in the US and had no ceiling. Against this backdrop, year 22 began with surprises and a realisation. The surprise was that their currencies depreciate when the Fed moves the interest rate for the first time if the other central banks do not do so simultaneously. That cost the Euro a 23% drop against the dollar. Second, the addition of economic sanctions against Russia over the Ukraine operation became the opportunity of a lifetime for China to consolidate an Eastern financial architecture. Finally, with the world already fragmented, the US opted firmly for import substitution policies and the de-globalisation that goes with them; while the Asian bloc led by China is advancing with its growth and globalisation.

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The distributional problems of inflation and the limits of monetary policy.

Vie, 10/21/2022 - 01:36 -- bacosta

The Fed remains resolute in its policy of raising interest rates. In its statements, it shows particular concern about an imbalance in its labour market following the social protection policies during the pandemic in the USA.

How is 2022 doing

Vie, 07/01/2022 - 11:39 -- bacosta

In January 2022, the IMF predicted a year of low growth with high inflation. Since then, the IMF has twice lowered its projections giving a gloomy outlook for global growth. OBELA estimated that the FED and the European Central Bank were in a dilemma where they would either ride with high inflation and some recovery or use the conventional monetary instruments of raising the interest rate and knock down the fragile consumption and investment dynamics to bring down inflation. There was a difference between the Fed having a monetary problem and the ECB recognising the geopolitical inflation issues. The result has been that both decided to raise interest rates and reduce liquidity, with predictable consequences.

Inflation is more than a monetary problem.

Lun, 06/27/2022 - 16:08 -- bacosta

On June 15, the Fed raised its target interest rate by 75 basis points, the most substantial increase since 1994. The rate has already reached 1.75%, the pre-pandemic level. It does not seem to be enough; the expectation is that it will get 3.5% by the end of the year. Meanwhile, political and media discourses are looking for who to blame for the highest inflation rate in the last 40 years. A recession comes next. 

How does the world cope with fertilizer shortages?

Vie, 06/10/2022 - 23:12 -- bacosta

 

After being postponed for two years due to the COVID-19 pandemic, the World Economic Forum in Davos finally took place. The central agenda of world leaders and business leaders revolved around four points, climate change, rising inflation, Russia's special military operation and how it aggravated the energy and food crisis. 

The Molotov cocktail of hunger: inflation, shortages, climate crisis and war

Sáb, 05/21/2022 - 01:35 -- bacosta

Drought, climate crisis, fertilizer shortages and war threaten world food security and inflation; the Molotov cocktail fuse of hunger is burning. As the special military operation continues, it is not clear whether classical monetary theory will control inflation nor whether it will solve the problem of hunger.

The Return of Inflation: Realities, Perceptions, Politics

Mié, 05/18/2022 - 21:40 -- bacosta

Headlines are abuzz with the return of inflation, which, according to some measures, is now reaching 40 year highs. Considering that vanquishing inflation is supposed to be the one undisputed achievement of neoliberalism, why is it rising? Many explanations – from excessive money creation to disrupted supply chains to tightening labour markets and a post-lockdown surge in demand are offered.

The view that it would be a short term affair is giving way to a more sobering assessment of its persistence, particularly since geopolitical conflict gave inflation a booster shot. As for its solution, one thing is clear, dealing with it as Paul Volcker famously did in the late 1970s is not a politically affordable option for governments beholden to elites whose outrageous fortunes depend on low interest rates.

This panel will seek to examine this phenomenon by asking question such as why is inflation rising? Can we expect it persist? What are the major policy-options being discussed and what are their political implications of each? How should socialists think about this new problem?

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