Masters in Business Growth, Employment and Inflation Cycles With Lakshman Achuthan
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Aug 1, 2024 Lakshman Achuthan, co-founder of the Economic Cycle Research Institute and co-author of a book on economic predictions, shares his insights on the interconnectedness of growth, employment, and inflation. He discusses the impact of restrictive immigration policies and COVID-19 on the labor supply. The conversation explores the influence of economic stimulus measures, challenges of setting inflation targets, and the intricate dynamics of economic cycles. Achuthan also highlights how geopolitical events and demographic trends shape economic forecasts.
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Interplay of Economic Cycles
- Growth, employment, and inflation cycles are related but distinct, offering a nuanced view of the economy.
- Understanding these cycles helps explain how one can rise while another falls.
Misreading Economic Cycles
- In 2022, economists wrongly predicted 10% unemployment to curb inflation, like the 1970s.
- This was inaccurate, proving that distinct economic cycles can move independently.
Cyclical Nature of Inflation
- Inflation is cyclical and rarely stays flat at a target, contrary to many economic models.
- Leading indicators, like the Future Inflation Gauge, help predict inflation cycle turns.