Notes and Study material for Exams
Reflation: A Double-Edged Sword in the Economic Landscape The term “reflation” has become a buzzword in recent years, particularly in the context of global economic uncertainty. It signifies a deliberate attempt by policymakers to stimulate economic growth by increasing the money supply and lowering interest rates, aiming to combat deflationary pressures and revive demand. However, … Read more
The Hidden Tax: Understanding Inflation Tax Inflation, the persistent rise in the general price level of goods and services, is a complex economic phenomenon with far-reaching consequences. While often perceived as a gradual erosion of purchasing power, inflation also acts as a hidden tax, silently siphoning wealth from individuals and businesses. This article delves into … Read more
The Phillips curve is a relationship between the unemployment rate and the rate of InflationInflation in an economy. It was first proposed by A.W. Phillips in 1958, and it has been a subject of much debate and controversy ever since. The Phillips curve suggests that there is a trade-off between inflation and unemployment. In other … Read more
Unpacking Core Inflation: A Deeper Dive into the Sticky Price Puzzle The term “inflation” is a familiar one, often associated with rising prices and a shrinking purchasing power. But within this broad concept lies a nuanced distinction: core inflation. This metric, often presented alongside headline inflation, provides a more refined picture of price pressures within … Read more
Bottleneck Inflation: A Deep Dive into Supply Chain Constraints and Price Hikes The global economy has been grappling with a surge in inflation since the onset of the COVID-19 pandemic. While various factors contribute to this phenomenon, one particularly impactful driver is bottleneck inflation. This article delves into the intricacies of bottleneck inflation, exploring its … Read more
Galloping Inflation: A Threat to Economic Stability Inflation, the persistent increase in the general price level of goods and services in an economy, is a complex phenomenon with far-reaching consequences. While a moderate level of inflation is generally considered healthy for economic growth, excessive inflation, often referred to as “galloping inflation,” can wreak havoc on … Read more
The Base Effect: How Our Perceptions are Shaped by Starting Points The human mind is a fascinating and complex organ, constantly processing information and making sense of the world around us. One of the ways we do this is through the use of reference points, or bases, which act as anchors for our judgments and … Read more
Stagflation: A Modern Economic Enigma The term “stagflation” might sound like an oxymoron, a contradiction in terms. After all, how can an economy experience both stagnant growth and high inflation simultaneously? Yet, this seemingly paradoxical phenomenon has plagued economies throughout history, leaving policymakers and citizens alike grappling with its complexities. This article delves into the … Read more
Disinflation: A Deeper Dive into the Economic Phenomenon Disinflation, a term often used interchangeably with deflation, is a crucial concept in macroeconomics. While both terms relate to a decrease in the general price level, they differ in their nuances and implications. This article delves into the intricacies of disinflation, exploring its causes, effects, and potential … Read more
The Looming Shadow: Understanding Recessions and Their Impact Recessions, periods of significant economic decline, are a recurring feature of modern capitalism. While they are often associated with negative consequences, understanding their causes, characteristics, and potential solutions is crucial for navigating these turbulent economic waters. This article delves into the intricacies of recessions, exploring their definition, … Read more