Summary-analysis essay

Juan Manuel Prado Ramirez

Code: 1005087271

Professor: Carlos Eduardo Hurtado Arevalo

University of Quindío
Education Faculty
BA Modern Languages with emphasis on English and French
Reading comprehension and Writing production VI
Armenia, Quindío, 2022
 Summary-Analysis of the global recession and the inflation

The recession has been the biggest problem for all the countries that are trying to
overcome the COVID crisis. One article written by the newspaper "the Economist"
summarizes that since early October European shares have risen, with optimists
declaring an end to the continent's energy crisis in sight. Chinese stocks have jumped at
a recent talk that Xi Jinping will abandon his "zero-covid" policy, and regulators have
loosened their curbs on the property sector. On November 10th, on the news that
America's consumer-price inflation had lingerie in slightly below economists'
expectations, the tech-heavy Nasdaq index rose by 7%, one of the biggest daily moves
ever, as investors priced in lower interest rates. Along the same line, it is like the
energizer of the worldwide economy, affected by the powerful countries and it could
add social problems in those whose economy is not at all the best one. In this case, the
article is based on all the data on what happened with COVID illness before and after.

Something shown with some statistics says that in the year to September the
average unemployment rate in the OECD, a club of mostly rich countries that accounts
for approximately 60% of universal GDP, fell by close to one percentage point. Last
month, for the first time since the initial coronavirus lockdowns in 2020, rich-world
economies appeared to shrink. Likewise, a universal survey of purchasing managers
indicates a contraction for the first time since June 2020. Since July a "nowcast" of
universal annualized GDP growth produced by JPMorgan Chase, another bank has
halved. All the employees have the certitude to say that the economic system has been
affected all their working lives because they were fired for no reason. All the countries
that conform to the OECD are part of world development. Even though they fought
against the COVID pandemic, the recession around the world was not predictable but
has an obvious part. That clear part was that the US was printing numerous dollars to
fight the inflation of gasoline, the living cost, the basic services, and all the things that
affect the middle class.

Claudia Sahm, an economist, has suggested that a recession is nigh when the
average unemployment rate over the past three months rises by at least 0.5 percentage
points relative to its low during the previous year. We find that eight out of 31 rich
countries currently meet this criterion, including Denmark and the Netherlands. This is
not a high proportion compared with, say, the beginning of the universal financial crisis
of 2007-09. One proof is that in Colombia, for example, they offer informal jobs to all
the people that do not have the experience nor knowledge that they must have to
confront the economic issues that each person has to overcome in their contexts.
Although the minimum salary covers almost all the living part, the level of indigence
shows the big problem that nowadays is the high costs and the low payments with no
way of choosing (because there are external products that are not produced in
Colombia)

High prices to pay

Much depends, however, on the path of inflation. Central banks are willing to
induce a recession to lower inflation. However, the lags between tighter monetary
policy and lower inflation are not well understood. In some countries, lower energy and
food prices are helping to drag down the headline rate of inflation. According to figures
released on November 16th, inflation in Britain was 11.1% in October, higher than
economists' expectations. Almost everywhere "core" inflation, which better reflects
underlying price pressure, is rising. The joke is that are too various problems internal
and external to each country, so numerous products cannot escape of countries that have
the manufacture because they are in conflictive situations or do not have the opportunity
to send the products externally and maybe have a stable economy.

When the inflationary race started last year, it was confined in most countries to
some goods and services. This provided false comfort to pundits, many of whom
assumed that once prices stopped rising in these few components, overall inflation
would fizzle out. In June last year, 60% of prices in the median basket were rising by
more than 4% year on year. Even in Japan, the land of low inflation, the prices of a third
of the basket are rising by more than 4%. This broadening out is in part due to an
exceptionally strong dollar, which raises inflation by making imports more expensive.
Something interesting to consider is that there are TFA in each country; despite the
situation, they must use it if they want to decrease the digits of money devaluation
(inflation) and give the middle class a breath against those circumstances, additional to
it, the government has to increase the assistance to the national products. National
products are the answer to it if the government or a private institution is helping them,
also giving a fair price to negotiate the products that are needy to export them.
 Pay guides on the future path of inflation: when companies' labor costs rise, they
pass them on to customers in the form of higher prices. Inflation optimists point to data
from America, where there is some evidence of a pay slowdown, albeit from increases
of 6% or more year on year. New research from Pawel Adrjan of Indeed, a jobs site
web, and Reamonn Lydon of the Central Bank of Ireland suggests that nominal pay in
euro-zone job postings is rising by more than 5% year on year, and is still accelerating.
Also, having a tax on all those products that had been a promotion in the country
without paying anything, as retribution, must start paying to let the economy grow, and
eventually stop the economic gap that many countries have with the World Bank. Start
wasting money on other social problems can improve the measures and level of each
enterprise and worker.

The significant evidence of interest from Google-search data suggests that

universal interest in inflation has never been so high. Figures put together by the
Cleveland Fed, Morning Consult, a data company, and Raphael Schoenle of Brandeis
University gauge the public's inflation expectations in various rich countries. According
to its survey for October, in the median country, the public reckons prices will rise by
5% over the next year, as it has in previous months. The inflation expectations of
companies—the economic actors that set prices—are just as concerning. A survey by
the Cleveland Fed, based on research by Bernardo Candia, Olivier Coibion, and Yuriy
Gorodnichenko, three economists, finds that American firms currently expect inflation
of 7% over the next year, the highest level since the survey began in 2018. Inflation is
necessary, but we all can cease running it, that means that a 20% rate that is normally
speculated may become a rate of only 6 or 7% if the government, the private sector, and
all the people work together for a better economy. It raises the reason for the prices that
companies put on their products, but if the government takes action on it, the deals can
improve it they can work on. In that situation, economists must have to research how to
cease the inflationary phenomena and which is the best case to follow in a country with
the same characteristics.

Painful ignorance
Finally and less importantly, it is likely, therefore, that economists will also
struggle to predict when inflation will cool. Optimists hope that prices will once again
take people by surprise, with their rise slowing sooner than expected. That will leave
policymakers with a grim choice: to squeeze the economy tighter and tighter, or to let
prices spiral. All the expectations made by the high, middle, and low-class searching for
the best results must become congratulations to all the teams that researched about that
problem that all the countries are passing through, but it can be minimized by the
actions that enterprises and government do in the future economy. (The Economist;,
2022). (The Economist;, 2022)

Bibliography
The Economist;. (16 de 11 de 2022). The economist. Recuperado el 17 de 11 de 2022,
de Even a global recession may not crush inflation:
https://www.economist.com/finance-and-economics/2022/11/15/even-a-global-
recession-may-not-crush-inflation