World's Highest and Lowest Inflation Rates 2021 Inflation rates are rising in every country but not...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
World's Highest and Lowest Inflation Rates 2021 Inflation rates are rising in every country but not equally so. IMF DataMapper 25 10- -10% - Inflation rate, average consumer prices (Annual percent change, 2021) 21, World Higher inflation is here, but is it here to stay? You'd be forgiven if you are confused by the number of conflicting predictions, the different proposed strategies to curtail the rise in the cost of products and services, and even by whether inflation is really such a bad thing or, rather, a sign of a healthy economy. And all that without even beginning to consider inflation's ugly siblings: stagflation, hyperinflation, and deflation. Some of these questions are fairly easy to answer. Will inflation stay with us for very long? We don't know. Can inflation be good? It depends. Do we have the means to keep it under control? Maybe. The truth is that the primary tool used by central banks to bring inflation down-raising interest rates can sometimes potentially translate into the classic case of the cure being worse than the disease. If low rates encourage consumers and business to borrow and spend more money, the opposite will obviously happen with higher rates and when spending drops, so do prices and inflation. The problem is that intervening either too little or too much, too soon or too late, can unleash a number of unpleasant side effects: for example, increasing interest rates too rapidly can hurt fragile economies, damage up-and-coming businesses that rely heavily on credit to get started, worsen unemployment, and erode economic growth-in other words, cause a recession. In that sense, stable, moderate inflation is a sign of a healthy economy: as the economy grows, wages and consumer demand grow too; to meet increased demand, businesses gradually start hiring more people, buying more materials and supplies, and charging proportionally more for their products. The truth is that, just as there is no unique variable that can help predict inflation, there is also no sure-shot sequence of actions that can bring it down with the absolute certainty that no unwanted repercussion will follow. This is why, today, no serious expert is betting on how long this period of rising costs will last. Just months ago, encouraged by the vaccine rollout in many countries, central bankers around the world seemed more optimistic: they often described the first spikes in inflation as just "blips" bound to disappear soon. They were right about the main reason for those blips: Covid-19 caused serious disruption to the global economy-supply-chain bottlenecks meant that demands for what consumers and firms wanted and needed could not be met which prompted demand to far exceed supply, driving prices upwards. What they could not imagine is that the disruption would last for years, that new variants of the virus would continue to bubble up, that so many people would campaign against mask mandates and vaccines, and that global distribution of vaccines would be so unequal and uneven. Meanwhile, according to the IMF, inflation is set to increase this year in 144 countries out of 191 compared to 2020, when inflation increased in just 71 nations versus a year earlier. Will this season of global higher inflation last much longer? If we have learned anything over the past two years, it is that it is very difficult to predict the future when it depends to such a great extent on the whims of a virus. Central bankers will have to constantly rely on a wide variety of data to fine-tune their assessments and policies-kick the tires of the economy as we go, so to speak. World's Highest and Lowest Inflation Rates 2021 Inflation rates are rising in every country but not equally so. IMF DataMapper 25 10- -10% - Inflation rate, average consumer prices (Annual percent change, 2021) 21, World Higher inflation is here, but is it here to stay? You'd be forgiven if you are confused by the number of conflicting predictions, the different proposed strategies to curtail the rise in the cost of products and services, and even by whether inflation is really such a bad thing or, rather, a sign of a healthy economy. And all that without even beginning to consider inflation's ugly siblings: stagflation, hyperinflation, and deflation. Some of these questions are fairly easy to answer. Will inflation stay with us for very long? We don't know. Can inflation be good? It depends. Do we have the means to keep it under control? Maybe. The truth is that the primary tool used by central banks to bring inflation down-raising interest rates can sometimes potentially translate into the classic case of the cure being worse than the disease. If low rates encourage consumers and business to borrow and spend more money, the opposite will obviously happen with higher rates and when spending drops, so do prices and inflation. The problem is that intervening either too little or too much, too soon or too late, can unleash a number of unpleasant side effects: for example, increasing interest rates too rapidly can hurt fragile economies, damage up-and-coming businesses that rely heavily on credit to get started, worsen unemployment, and erode economic growth-in other words, cause a recession. In that sense, stable, moderate inflation is a sign of a healthy economy: as the economy grows, wages and consumer demand grow too; to meet increased demand, businesses gradually start hiring more people, buying more materials and supplies, and charging proportionally more for their products. The truth is that, just as there is no unique variable that can help predict inflation, there is also no sure-shot sequence of actions that can bring it down with the absolute certainty that no unwanted repercussion will follow. This is why, today, no serious expert is betting on how long this period of rising costs will last. Just months ago, encouraged by the vaccine rollout in many countries, central bankers around the world seemed more optimistic: they often described the first spikes in inflation as just "blips" bound to disappear soon. They were right about the main reason for those blips: Covid-19 caused serious disruption to the global economy-supply-chain bottlenecks meant that demands for what consumers and firms wanted and needed could not be met which prompted demand to far exceed supply, driving prices upwards. What they could not imagine is that the disruption would last for years, that new variants of the virus would continue to bubble up, that so many people would campaign against mask mandates and vaccines, and that global distribution of vaccines would be so unequal and uneven. Meanwhile, according to the IMF, inflation is set to increase this year in 144 countries out of 191 compared to 2020, when inflation increased in just 71 nations versus a year earlier. Will this season of global higher inflation last much longer? If we have learned anything over the past two years, it is that it is very difficult to predict the future when it depends to such a great extent on the whims of a virus. Central bankers will have to constantly rely on a wide variety of data to fine-tune their assessments and policies-kick the tires of the economy as we go, so to speak.
Expert Answer:
Related Book For
International Business Competing In The Global Marketplace
ISBN: 9781260387544
14th Edition
Authors: Charles Hill
Posted Date:
Students also viewed these general management questions
-
Calla Lily Nursery purchased a delivery truck on July 1, 20X1, for $82,000. The truck is expected to have a useful life of 6 years and a residual value of $10,000. The company uses the straight-line...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
In early 2018, Nick Tommarello could be proud of what he and his partners had accomplished. Their company, Wefunder, Inc., was the acknowledged leader in the equity crowdfunding industry, an industry...
-
At the beginning of the year, Plummer's Sports Center bought three used fitness machines from Advantage, Inc. The machines immediately were overhauled, installed, and started operating. The machines...
-
Refer to the preceding information for Paulcrafts acquisition of Switzers common stock. Assume that Paulcraft pays $480,000 for 100% of Switzer common stock. Paulcraft uses the cost method to account...
-
The assets of Fonzarelli SpA are presented as follows (amounts in thousands). Instructions Indicate the deficiencies, if any, in the foregoing presentation of Fonzarellis assets. Fonzarelli SpA...
-
Evans \& Sons, Inc. reported the following borrowings in a prior annual report: For each borrowing, indicate whether the bond or debenture was originally sold at its face value, a discount, or a...
-
Elon Corporation manufactures parts for an aircraft company. It uses a computerized numerical controlled (CNC) machining center to produce a specific part that has a design (nominal) target of 1.275...
-
Use the following information for questions 32 and 33 : Apple 's stock is one of 30 stocks in the Dow Jones Industrial Average (DJIA) index , which is a price - weighted index . Recently Apple had a...
-
A borrower had a loan of $ 70,000.00 at 6 % compounded annually comma with 10 annual payments. Suppose the borrower paid off the loan after 5 years. Calculate the amount needed to pay off the loan....
-
What are the mechanisms underlying genetic variation at the molecular level, including single nucleotide polymorphisms (SNPs), copy number variations (CNVs), and structural rearrangements, and how do...
-
Question 3 B [Soalan 3] (a) A conveyor system consists of EIGHT(8) major components of which all components must be working in order for the overall system to function. As illustrated below in Figure...
-
In making the correct diagnosis, it was important to know that Carls serum albumin level was normal. Why? Why was Carls urinary Ca 2+ excretion elevated (hypercalciuria)? What was the relationship...
-
The pricing analyst at Richford Triathlon finds that when she increases the price of the Richford Florida triathlons from 650 USD to 750 USD, the event ticket sales drop from 4,000 to 3,800. Show all...
-
1) Write a program using the switch statement name Grade Report that reads a grade from the user and prints the comments accordingly. Hint Prompt the user to enter their grade user must be prompt to...
-
For each function find an interval [a,b] so that f(a) and f(b) have opposite signs f(x) = e^x-2-x f(x) = cos (x)+1 -x f (x) = ln (x) -5+ x f(x) = x^2 -10x +23 let f(x) =x^2-x +2 a) find the Newton-...
-
Evaluate the integral, if it exists. Jo y(y + 1) dy
-
What are trend percentages and how are they calculated? What pitfalls must financial statement users avoid when preparing trend percentages?
-
During the past year, Lite Company had net income of \(\$ 5\) million, and Scanlon Company had net income of \(\$ 8\) million. Both companies manufacture electrical components for the construction...
-
Blare Company had a return on sales of 6.5 percent and an asset turnover of 2.40. What is Blare's return on assets?
Study smarter with the SolutionInn App