The Risks of Raising Interest Rates on Inflation

Inflation is taking a big bite out of americans everyday budget. The average price of a big knack right now is wopping five dollars and 94 cents. Since the 19 eighties, this relationship between interest rates and inflation is far less obvious than you might expect. One idea is that it's an artifact. You raise rates when inflation is going up. That's what the central bank does. It doesn't raise them enough to actually strangle the inflation,. so what you get is the coincidence of rising interest rates and rising inflation. Or it could be an effect which is really perverse, wherebyra sing interest rates, you restrict supply in some way, not just demand. And there are