Ay: Ocak 2023

Notwithstanding these indicators, it is too early to say whether inflation has been contained. Nevertheless, the current price surge has taught us two vital lessons. Firstly, economists’ standard models – particularly the dominant one, which assumes the economy is constantly in equilibrium – were rendered virtually useless. Secondly, those who declared firmly that it would take five years of misery to drain the system of inflation have already been debunked. Inflation has dropped drastically, with the seasonally adjusted CPI for …

The markets have recovered substantially in January, buoyed by declining inflation and optimistic economic forecasts. The Chinese recovery is a significant contributor to this optimism, as well as the relief in European attitude as the eurozone may emerge from recession. These are market elements that may prove to be a mirage. All of these developments may lower the likelihood of a recession, but stagnation remains a certainty. Europe’s transition from a severe recession to stagflation due to a mild winter …

Considering all of 2022’s economic setbacks, the outlook for the new year is dark, with recession fears ruling much of the discussion. However, an old finance-industry rational and current real-economy developments may have weakened the pessimists’ position. The causes for such pessimism are not difficult to identify. The enormous inflationary surprises of 2022 caused a massive and swift tightening of monetary policies in most major nations, and leading central banks have maintained their tough stance. Although the Federal Reserve of …