Interest hikes are not always a smooth answer.
The inflation rate has been a recent ongoing hot topic of debate as more and more countries are experiencing a surge in consumer prices, according to the latest data. It is, however, an expected trend to see inflation decrease during a recession period and increase during expansions. A controlled inflation is regarded as a healthy measure of economic recovery, but what is currently happening is indicative of a potential recession, as inflation in many countries continues to be high and persistent. The aftermath of the pandemic had direct and indirect consequences that transformed our consumption habits, stressed the global supply chain and the economy in general.
Extreme outlier events, such as the ongoing Covid-19 pandemic, have a tendency to create a destabilising force throughout many socio-economic aspects of our life. Our behaviours and habits have sustained considerable changes that collectively impact long-term macroeconomic trends. The usual way when norms and social behaviour undergo transformations can be associated with some technological innovation that becomes a catalyst for change. Many changes observed recently were accelerated through government policy regarding public health, safety and economic assistance. These changes are seen in consumer habits, such as shopping preferences, living locations or work norms, such as online meetings vs work travel. The purpose of these policies was to target specific problems, such as lockdowns to combat the surging number of cases, economic assistance to combat rising unemployment and so on. Yet as one problem is tackled, another sprouts out like a game of Whac-A-Mole.
