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Recession, Hyperinflation, and Stagflation - CrCo > .Phillips Curve - Inflation inversely proportional to unemployment - EcUnd > .
22-10-28 How China Is Helping to Reduce Inflation - Patrick Boyle > .
22-10-27 Xina's Economy 60% Smaller Than Claimed - Macro > . skip > .
22-10-27 GDP Deflator - Macro > .
22-1-15 Why Turkey Is Not Fixing It's Hyperinflation Problem - EcEx > .
In economics, stagflation or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.
The term, a portmanteau of stagnation and inflation, is generally attributed to Iain Macleod, a British Conservative Party politician who became Chancellor of the Exchequer in 1970. Macleod used the word in a 1965 speech to Parliament during a period of simultaneously high inflation and unemployment in the United Kingdom. Warning the House of Commons of the gravity of the situation, he said: "We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation. And history, in modern terms, is indeed being made."
Macleod used the term again on 7 July 1970, and the media began also to use it, for example in The Economist on 15 August 1970, and Newsweek on 19 March 1973. John Maynard Keynes did not use the term, but some of his work refers to the conditions that most would recognise as stagflation. In the version of Keynesian macroeconomic theory that was dominant between the end of World War II and the late 1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts, both in social terms and in budget deficits.
On Monday October 18, 2021, Beijing released new economic data, and it does not look good. The third quarter economy under performed and it serves as the harbinger of more pain ahead in the final three months of the year. Some analysts fear stagflation is coming.
What Is Stagflation? - Marginal > .
skip Responds ad > . timestamps:
0:00 - introduction
1:57 - is the US like Weimar?
13:07 - when is hyperinflation unstoppable?
18:50 - is the US special?
20:27 - how to protect yourself
1923: Hyperinflation | Weimar Germany - long, long > .1:57 - is the US like Weimar?
13:07 - when is hyperinflation unstoppable?
18:50 - is the US special?
20:27 - how to protect yourself
Inflation ..
Mid-COVID Inflation - 2021 →
Shelter Index ..
1) Hyperinflation - when a country experiences a monthly inflation rate of over 50% or around 13,000% annual inflation.
a. Extreme inflation also forces people to spend as quickly as possible rather than save of lend, so there is no money available to fund new businesses. And all that uncertainty limits foreign investment and trade.
b. The more money you print, the more inflation you get.
c. Economists call the number of times a dollar is spent per year a velocity of money. When people spend their money as quickly as they get it, that increases velocity, which pushes inflation up even faster.
2) Depression.
a. After the initial crash in 1929 the federal reserve dropped interest rates to zero, output and prices fell, and regular people started to expect further price declines. Unemployment rose to 25% and the average family income dropped by around 40%.
3) Stagflation - when output slows down or stops, or stagnates at the same time that prices rise. Stagnant economy + inflation = stagflation.
a. The FED tried to address this by boosting the money supply and cutting interest rates, but output couldn't rise much because of low productivity and the oil shortage. So all that extra money just triggered inflation.
Stagflation ..
a. Extreme inflation also forces people to spend as quickly as possible rather than save of lend, so there is no money available to fund new businesses. And all that uncertainty limits foreign investment and trade.
b. The more money you print, the more inflation you get.
c. Economists call the number of times a dollar is spent per year a velocity of money. When people spend their money as quickly as they get it, that increases velocity, which pushes inflation up even faster.
2) Depression.
a. After the initial crash in 1929 the federal reserve dropped interest rates to zero, output and prices fell, and regular people started to expect further price declines. Unemployment rose to 25% and the average family income dropped by around 40%.
3) Stagflation - when output slows down or stops, or stagnates at the same time that prices rise. Stagnant economy + inflation = stagflation.
a. The FED tried to address this by boosting the money supply and cutting interest rates, but output couldn't rise much because of low productivity and the oil shortage. So all that extra money just triggered inflation.
The term, a portmanteau of stagnation and inflation, is generally attributed to Iain Macleod, a British Conservative Party politician who became Chancellor of the Exchequer in 1970. Macleod used the word in a 1965 speech to Parliament during a period of simultaneously high inflation and unemployment in the United Kingdom. Warning the House of Commons of the gravity of the situation, he said: "We now have the worst of both worlds—not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of 'stagflation' situation. And history, in modern terms, is indeed being made."
Macleod used the term again on 7 July 1970, and the media began also to use it, for example in The Economist on 15 August 1970, and Newsweek on 19 March 1973. John Maynard Keynes did not use the term, but some of his work refers to the conditions that most would recognise as stagflation. In the version of Keynesian macroeconomic theory that was dominant between the end of World War II and the late 1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts, both in social terms and in budget deficits.
For the three months ending September, China's GDP grew by 4.9 per cent from a year ago, missing market expectations of 5 per cent growth and well below the 7.9 per cent gain seen in the second quarter. Bear in mind, the first quarter GDP grew at 18.3 percent. The first half of this year saw an strong growth due to a post-pandemic rebound. But the Delta variant outbreaks, disasters such as floods and Beijing’s political policy intervention, plus self-inflicted power outage, produced lukewarm growth in the 3rd quarter.
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