Grant’s Current Yield Podcast
NOT SO GOOD NEWS
Oct 18, 2024
Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, shares his expertise on business cycles and inflation forecasting. He dives into historical inflation trends, emphasizing lessons from past decades. The discussion navigates through the complexities of current economic indicators, labor shortages, and the impact of post-COVID spending. Achuthan also sheds light on the evolution of inflation gauges and the challenges policymakers face in a K-shaped economy, linking historical movements to today's inflationary pressures.
32:22
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Quick takeaways
- Current inflation rates remain a significant concern, with the lack of consensus among economists complicating effective policy responses.
- The resilience of the U.S. labor market amid inflationary pressures reflects a cautious approach by businesses shaped by past economic experiences.
Deep dives
Inflation Trends and Their Implications
Current inflation rates are not decreasing as quickly as many had hoped, indicating that inflation remains a significant concern. Despite a general reduction in inflation pace, it is described as still simmering, suggesting potential surprises in the future. Various theories attempt to explain the causes of inflation, including monetary, fiscal, and expectation-driven perspectives, yet no consensus has been reached among economists. This uncertainty poses challenges for policymakers who must navigate inflationary risks while trying to support economic stability.
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