Post by account_disabled on Feb 25, 2024 1:42:28 GMT -5
First: Leave the fight against inflation to the central banks, arguing that it is a monetary phenomenon that occurs when the amount of money in circulation increases excessively, so that it can be stopped by controlling the latter. It is known that there are non-monetary factors that trigger it. Second: Believing that inflation is always stopped by raising interest rates because this decreases the demand for means of payment and, as a consequence, reduces the demand for goods and services and investment generated by the excess demand that raises prices. It is known that rate increases do not always have an impact, or with due intensity, on the demand for money, thus breaking this ideal sequence. Third: Give the same monetary treatment to inflationary processes of different types. Some, produced by excess demand when the economy is at its maximum level of potential production, that is, when it is willing to spend on goods that are not available. Others, supply, produced when, for whatever reason, there is sufficient productive capacity but the goods do not reach the markets or arrive at a higher price due to extraordinary circumstances.
And others, a mixture of both and even some other additional factor. What good is it to condemn others for crimes that one is willing to commit? The latter is precisely what is happening currently, since it is known that prices are rising not only due to excess demand derived from liquidity injections during the pandemic, but also due to cost increases in very specific sectors, due to material Chinese Thailand Phone Number List blockades. of supply, for structural reasons such as lack of competition and concentration of power, and due to the invasion of Ukraine Fourth: Apply measures that affect the demand for all goods and services when the price increase comes from or occurs as an effect of what happens in a specific sector, market or product. The debt of now has no comparison with that of then and a rise in interest rates, not of the same magnitude but minimally considerable, would cause a global private and public debt crisis of colossal dimensions. Fifth: Do more damage with the treatment than that produced by the disease.
This is what happens when the symptom (fever or rising prices) is attacked without eliminating its causes: depressing global demand for all goods and services (raising interest rates) when it is only a specific problem that is Provoking price increases is equivalent to killing the sick person so that his fever goes down. Sixth: Consider that the only costs of companies that must be stopped so that prices do not rise are salary costs. It is known that there are others (energy, financial, fiscal, regulatory...) as much or more determinants of price increases. Seventh: Do not act on the structural conditions of the economy. It is known that the lack of competition and the regulation of markets to the benefit of oligopolies (in the financial, commercial distribution or electricity sectors ) are allowing many companies to increase margins and raise prices unnecessarily. Eighth: Believe that inflation like the current one, with the characteristics indicated, can be stopped with the sole intervention of an independent monetary authority. The cooperation of central banks with governments is essential to coordinate monetary policy with fiscal, supply, competition and income policies and prevent them from blocking each other.
And others, a mixture of both and even some other additional factor. What good is it to condemn others for crimes that one is willing to commit? The latter is precisely what is happening currently, since it is known that prices are rising not only due to excess demand derived from liquidity injections during the pandemic, but also due to cost increases in very specific sectors, due to material Chinese Thailand Phone Number List blockades. of supply, for structural reasons such as lack of competition and concentration of power, and due to the invasion of Ukraine Fourth: Apply measures that affect the demand for all goods and services when the price increase comes from or occurs as an effect of what happens in a specific sector, market or product. The debt of now has no comparison with that of then and a rise in interest rates, not of the same magnitude but minimally considerable, would cause a global private and public debt crisis of colossal dimensions. Fifth: Do more damage with the treatment than that produced by the disease.
This is what happens when the symptom (fever or rising prices) is attacked without eliminating its causes: depressing global demand for all goods and services (raising interest rates) when it is only a specific problem that is Provoking price increases is equivalent to killing the sick person so that his fever goes down. Sixth: Consider that the only costs of companies that must be stopped so that prices do not rise are salary costs. It is known that there are others (energy, financial, fiscal, regulatory...) as much or more determinants of price increases. Seventh: Do not act on the structural conditions of the economy. It is known that the lack of competition and the regulation of markets to the benefit of oligopolies (in the financial, commercial distribution or electricity sectors ) are allowing many companies to increase margins and raise prices unnecessarily. Eighth: Believe that inflation like the current one, with the characteristics indicated, can be stopped with the sole intervention of an independent monetary authority. The cooperation of central banks with governments is essential to coordinate monetary policy with fiscal, supply, competition and income policies and prevent them from blocking each other.