{"id":25586,"date":"2017-09-13T10:40:23","date_gmt":"2017-09-13T15:40:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25586"},"modified":"2017-09-13T10:40:23","modified_gmt":"2017-09-13T15:40:23","slug":"the-mystery-of-the-missing-inflation","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25586","title":{"rendered":"The Mystery of the Missing Inflation"},"content":{"rendered":"<h3 class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-7 columns article__title article__title--main u-mb-se\" dir=\"ltr\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/monetary-policy-missing-inflation-by-nouriel-roubini-2017-09\">The Mystery of the Missing Inflation<\/a><\/h3>\n<div class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-6 xlarge-offset-3 columns\">\n<section class=\"u-mt-se\">Since the summer of 2016, the global economy has been in a period of moderate expansion, yet inflation has yet to pick up in the advanced economies. The question that inflation-targeting central banks must confront is straightforward: why?<\/section>\n<section class=\"article__body article__body--commentary english\" dir=\"ltr\" data-page-area=\"article-body\">\n<p data-line-id=\"161f585b9dea43ad84254f3deeebebf0\">NEW YORK \u2013 Since the summer of 2016, the global economy has been in a period of moderate expansion, with the growth rate accelerating gradually. What has not picked up, at least in the advanced economies, is inflation. The question is why.<\/p>\n<aside class=\"inlay inlay--slide slide__container show-for-medium editorpick-container\">\n<article id=\"editor-pick-59b8f11478b6c725a80544c6\" class=\"listing slide \" data-url=\"monetary-policy-missing-inflation-by-nouriel-roubini-2017-09\" data-page-area=\"editorpicks\">\n<figure class=\"image image--ratio-16-9\"><picture><source srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-medium.1.png\" media=\"(min-width: 1200px)\" data-srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-medium.1.png\" \/><source srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-small.1.png\" media=\"(min-width: 450px)\" data-srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-small.1.png\" \/><source srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-medium.1.png\" data-srcset=\"https:\/\/webapi.project-syndicate.org\/library\/7e06a02fa70543736854896ba3528265.16-9-medium.1.png\" \/><img decoding=\"async\" class=\" lazyloaded\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"\" \/><\/picture><\/figure>\n<header class=\"listing__header\">\n<p class=\"listing__title\"><span style=\"color: #333333; font-size: 16px;\">In the United States, Europe, Japan, and other developed economies, the recent growth acceleration has been driven by an increase in aggregate demand, a result of continued expansionary monetary and fiscal policies, as well as higher business and consumer confidence. That confidence has been driven by a decline in financial and economic risk, together with the containment of geopolitical risks, which, as a result, have so far had little impact on economies and markets.<\/span><\/p>\n<\/header>\n<\/article>\n<\/aside>\n<p data-line-id=\"adaf4bbb89254d23be87e2137d8f7cb7\">Because stronger demand means less slack in product and labor markets, the recent growth acceleration in the advanced economies would be expected to bring with it a pickup in inflation. Yet core inflation has fallen in the US this year and remains stubbornly low in Europe and Japan. This creates a dilemma for major central banks \u2013 beginning with the US Federal Reserve and the European Central Bank \u2013 attempting to phase out unconventional monetary policies: they have secured higher growth, but are still not hitting their target of a 2% annual inflation rate.<\/p>\n<p data-line-id=\"e921b5ae40b14c569b68c0255758f878\">One possible explanation for the mysterious combination of stronger growth and low inflation is that, in addition to stronger aggregate demand, developed economies have been experiencing positive supply shocks.<\/p>\n<p data-line-id=\"7a7d7f1fff084e45bc58b0658ee885a5\">Such shocks may come in many forms. Globalization keeps cheap goods and services flowing from China and other emerging markets. Weaker unions and workers\u2019 reduced bargaining power have flattened out the Phillips curve, with low structural unemployment producing little wage inflation.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Mystery of the Missing Inflation Since the summer of 2016, the global economy has been in a period of moderate expansion, yet inflation has yet to pick up in the advanced economies. The question that inflation-targeting central banks must confront is straightforward: why? NEW YORK \u2013 Since the summer of 2016, the global economy [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[426,1917,8402],"class_list":["post-25586","post","type-post","status-publish","format-standard","hentry","category-economics","tag-inflation","tag-nouriel-roubini","tag-project-syndicate"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25586"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25586\/revisions"}],"predecessor-version":[{"id":25587,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25586\/revisions\/25587"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}