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Inflation Articles Review

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Inflation Articles Review

The three articles provide critical information on inflation in terms of globalization, different signals, and drivers. The consensus is that in this hyper globalization period, the world financial cycle has been influential over the local flow system. The trend results in an imminent change in the products, trade, and monetary pathways. The articles provide insights into central financial institutions in their efforts to analyze survey and market-oriented parameters. These monetary institutions have to monitor and study various signals in the labor market and inflation. It is apparent in the case of the US were imported, and domestically produced goods have accelerated due to trade excesses from East Asia.  The articles provide critical insight into the need to understand inflation to avoid negative implications of globalization on domestic inflation. The knowledge from the materials is crucial for proper management of globalization impacts, drivers of inflation, and different signals. The articles tend to agree that the current economic challenges are caused by global factors as the drivers that can be predicted for the implementation of relevant measures.

In forecasting possible contradiction or slow down of economic activity using essential indicators that are the trend of the unemployment rate and direction of the yield curve. Economists believe that inversions of yield curve provide an accurate prediction. The yield curve inversion is caused when profits from long term treasury bills are less than the short term ones (Kliesen, 2018). Therefore, the narrowing gap between the two treasury securities and lowered unemployment suggest tangible economic development. The use of the two underlying factors can be useful in accessing the globalization effect and tips for navigating through different signals in the economy. It is a matter of changing the slope of the curve and managing shifts in unemployment. Anchored inflation predictions are necessary for stable values as they are influenced by the current actions (Adeney, Arsov & Evans, 2017). Various methods are applying in accessing inflation expectations, though yield more reliable results than others. However, the most advocated for is the market-implied market predictions that are immediate and future rates from market swaps. It is complemented by data from professional surveys on inflations expectations across all boundaries.

Adeney, R., Arsov, I., & Evans, R. (2017). Inflation expectations in advanced economies. The Recent Economic Performance of the States 1 Insight into Low Wage Growth in Australia 13 Housing Market Turnover 21 Inflation Expectations in Advanced Economies 31 Developments in Banks’ Funding Costs and Lending Rates 45, 31.

Kliesen, K. L. (2018). Recession Signals: The Yield Curve vs. Unemployment Rate Troughs. Economic Synopses, (16), 1-3.

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