INFLATION
What is inflation?
A rise in prices of goods and services.
In case of crisis, what does the Federal reserve act as?
Lender of last resort.
What does IMF stand for?
International Monetary Fund
How did COVID impact the economy (any 3 aspects)?
Economic slowdown, declining demand for cars, slower production of chips in China, effects on tourism, labor disruptions leading to unemployment, supply chain disruptions, business closures, and increased health crisis.
Name the phenomenon that describes how older workers left during COVID-19 due to shortage of labor. (Barry Eichengreen’s reading).
The Great Retirement
What are federal reserve swap lines used for?
To provide dollar liquidity to foreign central banks.
What is the primary role of the IMF?
Provides loans to countries experiencing difficulties meeting their international payments, and ensures financial stability.
True or False: During the COVID-19 crisis, emerging economies faced capital inflows and improved access to U.S. dollar liquidity.
False — they faced massive capital outflows and severe dollar shortages
What is the difference between demand-driven and supply-driven inflation pressures?
Demand-driven arises from excessive spending, while supply-driven arises from restricted production.
What are global financial safety nets?
Web of financial resources and institutional arrangements that are expected to provide emergency financial services.
How did the IMF initially advise governments to respond to COVID-19.
By encouraging large-scale spending and intervention. The IMF also promoted a strong change in policy actions to help the developing countries.
How did the Fed’s COVID-19 actions favor advanced economies over emerging ones?
The Fed granted swap lines mainly to advanced economies, while most emerging markets were excluded and left with limited IMF support