International Business, Economics, and Cultures

International Business, Economics, and Cultures
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International Business, Economics, and Cultures
In the video, the discussion is centered on the topic of inflation and its rise during the pandemic. Since the pandemic started, the entire world saw a surge in the prices of goods. As uncertainty loomed and governmental restrictions were being effected, demand for products surged while supply went down. In the video, such a scenario is said to be good, especially for a short period of time. Apparently, as per the video, increased demand makes inflation desirable and is directly associated with growth. However, it is also claimed that when inflation is prolonged, it can be detrimental to a country’s economy. The video claims that prolonged inflation can have the detrimental effect of discouraging investment and stalling growth. Aside from the above, the video also speaks on the idea of expectations and their importance while trying to manage inflation. It is claimed that the central bank needs to be on high alert and communicate early to ensure inflation expectations are anchored. If not anchored, the chances are high that inflation would skyrocket, and it would be incredibly difficult to resume normalcy. Finally, the video delves into the aspect of inflation levels maintaining an upward trajectory and starting to return to pre-pandemic levels in 2022. However, there is a warning that both developing and developed countries could still experience higher inflation rates in the post-pandemic period. For the developed nations, the reasons for surging inflation rates would include high housing costs and prolonged supply shortages. On the other hand, developing nations would continue to experience surging inflation rates because of high food prices and the falling currency values expected.
The assertions made in the video are quite compelling, and I agree with everything that has been said. Regarding inflation being desirable in the short run, this assertion is indee...