Inflation isn’t as severe as a financial crisis, especially when price increases coincide with a swift economic recovery. While financial crises are fundamentally unpredictable, macroeconomic modeling requires projecting inflation. Why, therefore, did practically everyone last year get the US inflation story so wrong? In May, a poll of 36 private-sector forecasters found that the median […]
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Demand-pull When the demand for particular goods and services exceeds the economy’s ability to supply those wants, inflation occurs. When demand exceeds supply, prices are forced upwards, resulting in inflation. Tickets to watch Hamilton live on Broadway are a good illustration of this. Because there were only a limited number of seats available and demand
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To listen to the podcast, press play on the player above and follow along with the transcript below. In its current form, this transcript was created automatically and then edited for clarity. Between the audio and the text, there may be some discrepancies. Republican attempts to invalidate state-ordered congressional districting schemes in North Carolina and
Is There Gonna Be A Recession? Read More »
Assume Kelly, a former economist who is now an opera singer, has been asked to perform in the United Kingdom. Simultaneously, an American computer business manufactures and sells all of its computers in Germany, while a German company manufactures and sells all of its automobiles within American borders. Economists need to know what is and
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CD rates should begin to rise in 2022, but don’t get too excited just yet: yields aren’t forecast to grow considerably and will likely remain below inflation. Inflation is expected to decline in 2022, but remain around 3% annually, according to McBride. Despite the fact that the Federal Reserve is expected to raise rates three
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A recession is a natural element of the business cycle that occurs when the economy declines for two consecutive quarters. A depression, on the other hand, is a prolonged decline in economic activity that lasts years rather than months. This makes recessions far more common: in the United States, there have been 33 recessions and
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The Federal Reserve has not set a formal inflation target, but policymakers usually consider that a rate of roughly 2% or somewhat less is acceptable. Participants in the Federal Open Market Committee (FOMC), which includes members of the Board of Governors and presidents of Federal Reserve Banks, make projections for how prices of goods and
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Although rising housing expenses are expected to reduce slightly in the coming year, as long as inflation remains high, the cost of purchasing a home will continue to rise. Housing costs are expected to grow 16 percent year over year (YOY), according to The Motley Fool. That means a $400,000 house in 2021 will cost
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The African economy, which includes 54 countries, is expected to be worth $2.7 trillion in nominal terms in 2021, up $296 billion from 2020, according to IMF data. This is $246 billion less than the GDP of France, the world’s seventh largest economy. In nominal terms, Africa accounts for 2.84 percent of global GDP. After
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(1 + Stock Return) / (1 + Inflation) – 1 = (1.233 / 1.03) – 1 = 19.7% inflation-adjusted return Do you factor inflation in or out? Inflation is calculated using the consumer price index, which tracks price fluctuations for retail goods and services. The inflation rate measures the increase or reduction in the price
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