PROMPT:
One of the major concerns related to the US economy at the moment is INFLATION. On this Discussion you will start exploring this topic. As so many economists say “ uncontrolled inflation is too much money chasing the same goods and services” Here you will research the forces behind inflation. Make sure you leave political views not influence your assessments of the facts. This is not even a Political Science course. Lets analyze the facts as they are.
- Under the Trump administration, the US Federal Government, approved a never seen before 2 trillion dollars Stimulus Package in response to the concerns about economic side effects COVID-19 instilled in our society. A significant part of the Stimulus Package was designated to individuals, including unemployment compensation sent to millions of people as well as PPP for business in different industries. As the Biden administration took office, in January 2021 a new Stimulus Package was signed and approved to inject another 1.9 trillion dollars into the economy. As part of the new stimulus plan, the deadline for several benefits associated to the 1st Stimulus Package were postponed and continued for longer periods of time as originally planned. The great majority of the stimulus was approved and released before the COVID 19 vaccination was in place. Under the Biden administration stimulus efforts took place at the beginning of COVID 19 vaccination and continues as of right now. Several Economists and Policy makers have argued that this injections of money created one of the forms of inflation Demand Pull inflation. However, in parallel withthe inflation created by the Stimulus there was another one happening at the same time: Cost Push Inflation
- Question 1) What is Cost Push Inflation? Explain in detail and Provide source ( 10 points) How has the disruption of supply chain during the Pandemic pressured up the level of inflation? Please find a real case of either a firm, corporation or institution that has been affected by the disruption of the supply chain in their industry and explain their experience and how the situation pressured the prices they charge for their own goods and or services to a higher level. Present the evidence, explain and provide the source. (20 points) You can use up to 2 sources
- Question 2) How has the labor shortage that started during the Pandemic in March 2020 and lasted all the way to the beginng of 2022 pressured up the level of inflation ? Please find a real case of either a firm, corporation that has been affected by the disruption of the labor supply and explain their experience and how the situation pressured the prices they charge for goods and or services they offer ? Present the evidence, explain and provide the source. (20 points) You can use up to 2 sources
- Question 3) Since the last quarter of 2022 several major employers in the US started announcing rounds of lay offs. Among them, Amazon, Disney Company, Morgan Stanley among others. Goldman Sachs last week indicated last week that 3,200 jobs would be eliminated. What is the opportunity cost of the high inflation ? Explain in detail provide evidence. (20 points)
- Question 4) Bibliography (10 points)
potential useful resource:
https://www.reuters.com/markets/us/tech-firms-wall-street-lead-job-cuts-corporate-america-2023-01-11/
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