Thursday, June 17, 2021
Associate Professor of Economics Venoo Kakar discussed growing concerns about rising inflation in the U.S. and its impact on a variety of economic indicators.
"The biggest factor that influences inflation is inflationary expectations... what do people, businesses, and households expect inflation to be?" This expectation of inflation, Kakar explains, guides how households spend money and how businesses set their prices. "As more money is injected into the economy and as interest rates are kept low, people can borrow easily," Kakar says. "When they spend, there's more demand for goods and services, more jobs are created, and that keeps unemployment low."
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