Understanding inflation is essential for comprehending the global economy and predicting how changes in inflation are likely to impact economic activity, employment, and asset prices. Inflation, which refers to a general increase in the price of goods and services, results in a reduction in the purchasing power of money over time. Since 2008, the rate […]
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“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” ~ John Maynard Keynes Inflation in America is currently running hot, with the official rate hitting 6.2% in October, its highest level since 1990. Some market commentators saw this coming, and those same players predict that higher […]
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Death to Pennies
Inflation erodes the value of real currency ECONOMISTS tend to favour a small positive rate of inflation, and there are 4 reasons why this makes sense: Labour market flexibility: inflation allows relative real wages to adjust even if nominal wages do not move. A company that tries to pay workers less money is likely to meet […]
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Mankiw’s 10 Principles of Economics
Economics is about decision making in situations of scarcity ECONOMICS is the study of how individuals, firms and government make decisions to manage scarce resources. What does this mean exactly? Professor Greg Mankiw teaches economics at Harvard University and is the author of a popular economics text book called Principles of Economics which is used at many Ivy League […]