Economics class: The Fed risks reacting too slowly if inflation keeps rising
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Specification:
Economic growth, development economics, inflation and monetary policy
Click to read the article below and then answer the questions:
The Fed risks reacting too slowly if inflation keeps rising
With reference to chart 1, compare the recoveries in global output for 2020, 2009, 1991 and 1975
With reference to chart 2, compare the recoveries of the advanced economies with those of the emerging & developing economies
Briefly outline the reasons for the marked difference in the rate of economic recovery between the advanced economies and the emerging & developing economies
Using an AD/AS diagram, analyse the risks associated with President Biden’s highly aggressive monetary and fiscal policies
Given the lag between policy and outcomes, evaluate whether central banks of high-income economies should now begin to tighten monetary policy
Gavin Clarke, Emmanuel College
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