My Take on Econ

  This school is one of the more recent schools of economics as it surfaced in the 1930s. The theory was developed in the aftermath of the great depression. John Maynard Keynes , an economist from Cambridge University, neither supported the free market or the communist ideals. Instead of this, he took ideas from both and made a new idea of thinking. Keynesian economics . This branch of economics suggests that the government has the power to protect the economy from the harsh peaks and troughs in the business cycle using monetary and fiscal policy . This would be done by government spending in recessionary troughs and taxes in economic booms. There were more theories such as the multiplier effect . Fiscal policy Fiscal policy is a method of controlling the economy as a macroeconomist such as Jerome Powell in my last blog. Fiscal policy is all about taxes and government spending . There are two methods of using fiscal policy, expansionary and contractionary fiscal policy . The defini

Last month, in the US, the Fed (Federal reserve bank of the USA) chairman Jerome Powell changed his stance on “transitory inflation,” which he believed was the state of inflation in America, and now claims that inflation is no longer transitory. What does this mean? What does the phrase transitory inflation mean? First things first, transitory inflation refers to momentary inflation hikes, which would not make a mark on the economy in the form of higher inflation rates. The Fed chairman claimed that the Quantitative Easing (QE) that the Fed had been doing in order to stimulate the economy after the fallout of the pandemic would not leave a lasting impact on the US economy, thus it would be transitory inflation. Realistically, transitory inflation has little to no negative aspects outside of inflation increasing temporarily. Like an inflationary lump and then the inflation would not be significant in the grand scheme of things and thus not a big issue and the public should not panic