AUC Fundamentals of Macroeconomics

ReferencesCarragher, A. (2021, March 11). The EU Is a Dishonest Broker on Western Balkan Demographics. Carnegie Europe. Retrieved December 16, 2023, from https://carnegieeurope.eu/strategiceurope/84049Atoyan, R. V., Christiansen, L. E., Dizioli, A., Ebeke, C. H., Ilahi, N., Ilyina, A., Mehrez, G., Qu, H., Raei, F., Rhee, A. P., & Zakharova, D. V. (2016, July 20). Emigration and Its Economic Impact on Eastern Europe. Staff Discussion Notes, 2016(7), A001. IMF eLibrary. Retrieved December 14, 2023, from https://doi.org/10.5089/9781475576368.006Algan, Y., Carlin, W., Bowles, S., Segal, P. (n.d.). Unit 16: Technological Progress, Employment, and Living Standards in the Long Run. In the CORE Team, The Economy (section 16.7). Retrieved December 16, 2023, from https://www.core-econ.org/the-economy/v1/book/text/16.html.DW News. (2023, 25 June). Germany eases immigration laws to lure young professionals | DW News [Video]. YouTube. Retrieved December 16, 2023, fromWasti, S. (2018, October 23). The Myth of Brain Drain: How Emigration Can Help Poor Countries (Harvard Political Review). Center for Global Development. Retrieved December 16, 2023, from https://www.cgdev.org/article/myth-brain-drain-how-emigration-can-help-poor-countries-harvard-political-reviewHarper, J. (2019, September 11). No need to worry about “brain drain” as it’s a complete myth. hrmasia. Retrieved December 15, 2023, from https://hrmasia.com/no-need-to-worry-about-brain-drain-as-its-a-complete-myth/Boc, E. (n.d.). Brain Drain in the EU: Local and Regional Public Policies & Good Practices. https://www.espon.eu/sites/default/files/attachments/3%20Emil%20Boc%20Brain%20Drain%20in%20the%20EU.pdfSalmi, J., & Katya Salmi. (2017, March 24). Is the brain drain always negative? University World News. https://www.universityworldnews.com/post.php?story=20170321102746248Boc, E. (2020). Opinion of the European Committee of the Regions -Brain Drain in the EU: addressing the challenge at all levels THE EUROPEAN COMMITTEE OF THE REGIONS. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52019IR4645&rid=2Boc, E. (2020). Brain Drain in the EU: Local and Regional Public Policies and Good Practices. Transylvanian Review of Administrative Sciences, 16(59), 23–39. https://rtsa.ro/tras/index.php/tras/article/view/619/607‌Srivastava, S. (2020, February 19). Brain Drain vs Brain Gain – Assembly of European Regions. Aer.eu; https://aer.eu/brain-drain/‌COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Harnessing talent in Europe’s regions . (2023). Europa.eu. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023DC0032Packroff, J. (2023, January 6). Who benefits from the EU’s free movement of labour? Www.euractiv.com; EURACTIV. https://www.euractiv.com/section/economy-jobs/news/who-benefits-from-the-eus-free-movement-of-labour/Ellena, S. (2022, June 17). Ukraine reconstruction key to avoid brain-drain, academics warn. Www.euractiv.com; EURACTIV. https://www.euractiv.com/section/economy-jobs/news/ukraine-reconstruction-key-to-avoid-brain-drain-academics-warn/Amalie Holmgaard Mersh. (2022, March). Could EU’s cohesion policy be the health hero we always needed? Www.euractiv.com; EURACTIV. https://www.euractiv.com/section/health-consumers/news/could-eus-cohesion-policy-be-the-health-hero-we-always-needed/Demirguc-Kunt, A., & Muller, C. (2019, October 9). Is there a policy remedy for brain drain in Europe? World Bank Blogs. https://blogs.worldbank.org/europeandcentralasia/there-policy-remedy-brain-drain-europeThe CoR and European Commission join their forces to boost research and innovation at local and regional level. (2019). Europa.eu. https://cor.europa.eu/en/news/Pages/COR-EC-boost-research-and-innovation-.aspxEszter Hegedűs. (2022, November 19). Brain drain in Central and Eastern Europe. Hype&Hyper Hype&Hyper. https://hypeandhyper.com/brain-drain-in-central-and-eastern-europe/Twinch, E. (2023, October 10). EU and member states “must work together to tackle brain drain” - Research Professional News. Research Professional News. https://www.researchprofessionalnews.com/rr-news-europe-politics-2023-10-eu-and-member-states-must-work-together-to-tackle-brain-drain/From brain drain to brain circulation - Publications Office of the EU. (2023). Publications Office of the EU. https://op.europa.eu/en/publication-detail/-/publication/9e39b4bd-843c-11ee-99ba-01aa75ed71a1/language-enLem, P. (2020, January 10). Researcher “brain drain” rises to top of EU agenda - Research Professional News. Research Professional News. https://www.researchprofessionalnews.com/rr-news-europe-politics-2020-1-researcher-brain-drain-rises-to-top-of-eu-agenda/Talent retention: How can Europe tackle the challenges of brain drain and capacity building in EU13 countries? (2022, November 10). Science|Business. https://sciencebusiness.net/events/talent-retention-how-can-europe-tackle-challenges-brain-drain-and-capacity-building-eu13-0Activities to address brain drain in Europe - Swisscore. (2023, October 9). Swisscore - We Connect Switzerland and the European Union in Research, Innovation and Education. https://www.swisscore.org/activities-to-address-brain-drain/Zubașcu, F. (2023, June 22). Put more money into basic research to stop the brain drain from eastern Europe, says European Research Council head. Science|Business. Retrieved December 16, 2023, from https://sciencebusiness.net/news/European-Research-Council/put-more-money-basic-research-stop-brain-drain-eastern-europe-says-european-research-councilGolovics, J. (2019). Addressing the EU’s East-West Brain Drain on JSTOR. Jstor.org. https://www.jstor.org/stable/26831887Abu-Rashed, J., & Slottje, D. (2018, May 30). A Theoretical Analysis of the Beneficial Effects of the Brain-Drain Phenomenon. Canadian Journal of Development Studies / Revue Canadienne D’études Du Développement, 12(2), 357–366 | 10.1080/02255189.1991.12005924. Sci-Hub.se. https://sci-hub.se/https://doi.org/10.1080/02255189.1991.12005924Roma. (2018). Addressing brain drain - Publications Office of the EU. Publications Office of the EU.https://op.europa.eu/en/publication-detail/-/publication/1133d712-e706-11e8-b690-01aa75ed71a1/language-en This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

Script with References1. IntroductionWelcome to Christmas Special! My name is Lisa Weiss and today’s panel will center around the following question: facing an ageing crisis: is immigration the solution?The rapid ageing of the population - coupled with a decrease in birth rates - presents countries with a formidable challenge. Interestingly enough, we hear voices from both sides: while economists such as Giovanni Peri strongly advocate for the beneficial role of immigrants, experts including Martin Feldstein are more skeptical. Given the media attention this issue has been given, today we have brought together two experts – Vassily Merkulenko and Chiara Paretti (they say hi)– to explore whether and to what extent immigration can provide an economic solution to these ageing populations. According to the World Bank’s Development Report 2023, the developed world is facing a tremendous demographic shift. On the one hand, birth rates are plunging. This year, the World Economic Forum released statistics indicating that between 1950 and 2022, Mexico’s fertility rate dropped from nearly 7 to 1.8, well below the 2.1 needed for population replacement. This is contrary to Malthusian logic, which holds that the population grows when living standards increase. Furthermore, it stated that high- and middle-income countries are ageing quickly. The share of people over 65, is now at 20%, but is expected to reach 30% in just a few decades. Spain’s population of 47 million is projected to shrink by more than one-third by the end of the century, with those over 65 accounting for almost half of the population (Devictor, 2023). In an article that came out only 2 weeks ago, Business Insider points to shifting demographics as a direct cause for disinflation in countries such as South Korea, Italy, and now China. Japan is perhaps the most striking example of this phenomenon. In fact, Eurizon strategists refer to Japan as a living example of how an ageing population leads to aggregate demand outpacing supply.Economists like Feldstein already suggested in 2006 that the combination of increased longevity and a reduced birth rate will directly reduce the growth rates of economies. The ageing of the population will present a major fiscal challenge for governments, as slower growth of GDP means less tax revenue at the same time that social pensions and health care (which are currently tax-financed) will substantially increase.This means there will be fewer workers to support older people and growth and that countries will need to seek out immigrants to sustain their economies and fill labour shortages (Devictor, 2023). Thus, we wonder: is immigration the solution?  We will start by looking in more detail into the effects of ageing populations on labour supply. Vassily, what does the empirical evidence suggest?Discussion* LABOR PARTICIPATION/SUPPLYVasily: Total net immigration can offset a decline in labor participation from aging. Labor participation, or the participation rate, refers to the percentage of the working-age population employed or seeking employment. It is calculated by dividing the labor force by the population of working age. According to Giovanni Peri, migrants are typically younger than natives and a larger proportion are in working age relative to natives. Thus they increase the size of the labor force which counters natural decline (where more people age out of working age than how many come in)(Peri, 2020).Lisa: Is there a concrete example of migrants increasing labour participation within a country suffering from an ageing crisis?Vasily: Yes, we can see this benefit through Sweden. In Sweden, ¼ of the population will be over 65 by 2050 (Segendorf & Theobald, 2019). Among the native population, 54% are working age which means there is a high-dependency ratio. However, among the immigrants, 70% are working age with a low dependency ratio. Accordingly, immigrants have a good age structure for aging societies and without them, Sweden would suffer more from aging (Segendorf & Theobald, 2019). Chiara: Yes, but young migrants are not the sole solution. The real challenge lies in swiftly integrating these immigrants into the labor market (AGING SOCIETIES Policies and Perspectives, 2019). Simply increasing immigration numbers won't support high economic output alone. As Professor Joan Muysken mentions, it needs to be supplemented by increasing the labor force participation rate, not just among the young but especially among the older population (Muysken, 2008).Vasily: Yes but immigrants do still increase the wider participation in the labor market, particularly among highly skilled native women when there is an inflow of lower-skilled female labor migrants (AGING SOCIETIES Policies and Perspectives, 2019). This offsets the low labor force participation in aging populations. Chiara: But is this truly relevant in the long term? Leith Van Onselen states that while immigration can help in the short term, it primarily affects population numbers but doesn't significantly alter the long-term age structure. This is because immigrants themselves will age and eventually add to the older population segment. Therefore, we should not solely rely on immigration but better enhance the productivity of the aging workforce as well as foster social and healthcare systems that effectively cater to an older population (Onselen, 2017).Vasily: But we also have to note immigrant fertility rates are higher than those of natives (Peri, 2020). For example, Giovanni Peri notes that in the US, the total fertility rate of natives was 1.76 children per woman in 2017, whereas that of immigrants was 2.18 (Peri, 2020). This helps keep fertility levels close to replacement level which is needed especially in aging societies to provide labor supply in the long run (Peri, 2020).Lisa: Thank you! I think we have now a clearer picture of the dynamics of labour participation. Let’s turn to the skill composition of immigrants. Vassily, what insights can you share with us?* SKILL COMPOSITION/EMPLOYMENTVasily: The concept of complementarity is key to bring up. Complements to immigrant labor are factors of production, which differ from the immigrants, that become more productive with immigration. Therefore, if immigration acts as a complement in the production of a variety of goods and services, it has a positive effect on productivity, countering the decrease in productivity from aging (Segendorf & Theobald, 2019). Using this concept of complementarity, Segendorf & Theobald state that low-skill immigration has positive wage and employment effects on high-skill natives. These natives now have higher relative qualifications and can take on more complex tasks (Segendorf & Theobald, 2019).Chiara: Indeed, the concept of complementarity holds significant merit, however, we must also be cautious not to overlook the potential downsides regarding the immigrants’ skills. Indeed, Sgendorf and Theobald also acknowledge that an influx of low-skilled immigrants might lead to direct competition with low-skilled native workers, possibly impacting their wages and employment opportunities negatively on wages and employment for natives. Vasily: However, you also have to consider that low-skill natives can undergo training or become specialists to avoid this higher competition from immigrants (Segendorf & Theobald, 2019). For example, in Turkey, the high influx of Syrians created more higher-wage formal jobs and enabled occupational upgrading of Turkish workers who now enjoy higher average wages (AGING SOCIETIES Policies and Perspectives, 2019). This promotes growth under the strain of the elderly. Chiara: True, training and specialization are pathways for natives to avoid competition. However, this is not always a feasible or quick solution. Plus, as Segendorf and Theobald (2019) point out, it's essential to acknowledge that immigrants often arrive with lower human capital than natives, which can lead to a short-term decrease in average productivity. This reduction in productivity can be particularly challenging in aging societies where there is a pressing need for a skilled workforce to offset the economic impacts of a shrinking working-age population. Vasily: But in the long term there can be positive effects, with immigrants generating new ideas and bringing with them a higher probability of creating patents (Segendorf & Theobald, 2019). This can serve useful in raising productivity levels under an aging society. Lisa: Indeed, this is why we need to keep in mind the importance of labour unions and institutions. They play a vital role in the economic development of countries in the long run. Employers can help policymakers identify and define labour needs. They often know best where shortages are, where skills will be needed, and what kind of high- and low-skilled workers are most sought after (Devictor, 2023). According to the European Commission, several countries such as Spain, Finland or Ireland have put in place consultative bodies in which employers — as well as labour unions or local authorities — help identify strong skill matches. Furthermore, decent jobs generally lead to a smooth integration into the labour force and society. Chiara: Also, a notable trend that we witness today, particularly in Europe, is the increasing immigration of refugees. Yet, such a type of immigration doesn’t necessarily offer an effective solution for the challenges of aging. Refugees often lack local network ties and familiarity with the labor market, which hinders their swift integration into the workforce. This situation could further lead to public finance costs due to increased support needs. For instance, in Sweden, there is a notable trend of high unemployment rates among immigrants, particularly refugees. Research by Segendorf & Theobald (2019) indicates that it can take up to 20 years for refugees to become financially self-sufficient in Sweden. Therefore, this adds to the complexities of mana

Have you ever wondered how is immigration influencing public sentiment? And what role does public opinion play in shaping the economy? This will be the focus of this podcast, as we explore the public opinion on how immigration is affecting different countries' economies, comparing that to the real consequences brought by it. Thanks to two experts, one from Poland and one from the Netherlands, starting from the recently held political campaigns and elections, we will analyze the main macroeconomic concepts that are relevant in these countries, regarding immigration. The podcast concludes with the experts' personal reflections, offering a unique perspective that combines an awareness of public perception with a deeper understanding of the economic realities at play.ReferencesAlberda, A-P., Bloemendal, C., Braams, N., Fortanier, F., van Gaalen, R., Rooijakkers, B., & Smit, R. (2011). Trends in labour immigration to the Netherlands. In Internationalisation monitor 2011 (pp. 77-92). Statistics Netherlands. https://pure.uva.nl/ws/files/1859302/115188_Trends_in_labour_immigration_to_the_Netherlands.pdfAndrejuk, K. (2020). Prawica, lewica i postawy wobec imigrantów. Poglądy Polaków na imigrację i ich dynamika na tle trendów europejskich. Studia Migracyjne – Przegląd Polonijny, 46(4 (178)), 239–264. https://doi.org/10.4467/25444972smpp.20.046.12783Arbeidsmigratie vraagt beleidskeuzes én handhaving. (n.d.). Www.cpb.nl. Retrieved December 11, 2023, from https://www.cpb.nl/arbeidsmigratie-vraagt-beleidskeuzes-en-handhavingCentraal Bureau voor de Statistiek (2022, March 25). How many people immigrate to the Netherlands? Retrieved from Statistics Netherlands website: https://www.cbs.nl/en-gb/dossier/asylum-migration-and-integration/how-many-people-immigrate-to-the-netherlands-Chrzczonowicz, M. (2023, October 9). Jeden z najważniejszych tematów XXI wieku. Co mówią o nim partie przed wyborami? Oko.press. https://oko.press/polityka-migracyjna-co-mowia-o-tym-partie-przed-wyboramiErtl, M. (2023, September 20). EU demands answers about Poland visa scandal. BBC News. https://www.bbc.com/news/world-europe-66869671History of immigration in the Netherlands. (2020). Retrieved from UCL: https://www.ucl.ac.uk/dutchstudies/an/SP_LINKS_UCL_POPUP/SPs_english/multicultureel_gev_ENG/pages/geschiedenis_imm.htmlKrzyżanowska, N., & Krzyżanowski, M. (2018). “Crisis” and Migration in Poland: Discursive Shifts, Anti-Pluralism and the Politicisation of Exclusion. Sociology, 52(3), 612–618. https://doi.org/10.1177/0038038518757952Łaba, A. (2023, October 12). Cudzoziemcy na polskim rynku pracy – analiza sytuacji, wyzwania i perspektywy. Magazyn Rekruter. https://www.magazynrekruter.pl/cudzoziemcy-na-polskim-rynku-pracy-analiza-sytuacji-wyzwania-i-perspektywy/Many PVV voters disagree with anti-Islam rhetoric, Nexit. (2023, December 1). Retrieved December 11, 2023, from NL Times website: https://nltimes.nl/2023/12/01/many-pvv-voters-disagree-anti-islam-rhetoric-nexitMulder, R. (2018). Attitudes towards immigration in the Netherlands: The role of social trust, satisfaction with the state of the country and welfare attitudes. Master’s thesis, Leiden University. Retrieved from https://studenttheses.universiteitleiden.nl/access/item%3A2663762/viewPVV releases election program: “country without headscarfs, but with traditional Dutch coziness.” (n.d.). NL Times. https://nltimes.nl/2021/01/09/pvv-releases-election-program-country-without-headscarfs-traditional-dutch-cozinessQuell, M. (2023, November 24). Wilders’ immigration platform faces massive legal hurdles. DutchNews.nl. https://www.dutchnews.nl/2023/11/wilders-immigration-platform-mostly-not-legally-possible/Rainsford, S. (2023, October 13). Poland election: Poles prepare to vote as rivals end acrimonious campaign. Www.bbc.com. https://www.bbc.com/news/world-europe-67103038Referendum Ogólnokrajowe w 2023 r. (n.d.). Referendum.gov.pl. https://referendum.gov.pl/referendum2023/en/pytaniaSas, A. (2023, October 27). Poland: net migration 2020. Statista. https://www.statista.com/statistics/1063046/poland-net-migration/Shah, R., & van Uffelen, X. (2023, September 8). The highly skilled migrant feels less welcome and fears tightening of rules. Retrieved December 16, 2023, from de Volkskrant: https://www.volkskrant.nl/kijkverder/v/2023/the-highly-skilled-migrant-feels-less-welcome-and-fears-tightening-of-rules~v892382/van Haren, N., Wierstra, I., & van Meijl, T. (2019). The Politicization of the Immigration Debate in the Netherlands: Boat Refugees and the Possible Solution of Border Control. Anthropos, 114(1), 157–168. https://www.jstor.org/stable/26790642 Wedia, & Solanki, M. (2019, November 9). Nitrogen crisis: Fewer houses to be built in the Netherlands. IamExpat. Retrieved December 16, 2023: https://www.iamexpat.nl/housing/real-estate-news/nitrogen-crisis-fewer-houses-be-built-netherlands This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This podcast episode delves into the complexities of the post-COVID inflation surge. By analyzing the news articles and expert opinions, we attempt to unpack whether inflation was a transitory or a permanent phenomenon, focusing on the US, UK, Japan, and Europe.What we are referencing in our conversation:0:24 - To look at monthly inflation data of the countries we will be discussing, check this spreadsheet which has compiled statistics from each respective Central Bank: [2]0:30 - The video by Dr. Schasfoort: [5]1:04 - An article which further explores the definition of ‘permanent inflation’: [20]1:29 - Further explanations on how monetary policy impacts inflation expectation: [21]1:36 - An article which further explores the definition of ‘transitory inflation’: [15] + inflation expectations [21]2:08 - An European Central Bank report showing how the majority of inflation in the EU and USA were supply-driven: [10]2:24 - An article by Larry Summers on how the post-COVID inflation surge is permanent due to mishandling of economic policy: [4]2:40 - For further reading on how fiscal policy could have impacted inflation: [22]3:00 - Article on Christine Lagarde’s recent comments on permanent inflation: [3]3:17 - To read more about how the Phillips Curve and Inflation Expectation interact with one another: [21]3:24 - Christine Lagarde’s initial comments: [24]3:31 - Joseph Stiglitz on transitory inflation: [23]3:55 - Barsky & Kilian’s paper which examines previous oil shocks to examine why inflation rates were so high in the 1970s and 80s in the Western World: [8] 4:37 - See the historical interest rate data for the United States here: [25]4:45 - See the different types of Government support programmes in OECD countries here: [26]6:00 - A graphical representation of how inflation in the USA and EU is subsiding: [2]6:20 - Analysis based on report published by the European Central Bank on inflation dynamics in the EU and the USA: [1] 7:10 - See how Japan’s acute decline in working-age population compares to other developed economies: [27]7:25 - A Japanese newspaper that focuses on the Economy recently discusses how Trade Unions are increasing their expected wage increases given the labour shortage: [9]7:39 - A report with further analysis into how Japan’s export industry has become less competitive with the population trends and currency dynamics: [28]8:18 - Only mentioned implicitly, but we recommend this report by the Federal Reserve to see the role of markups in driving inflation: [29]9:02 - Article on EU exodus from UK: [30]9:22 - Article on the British Currency Crisis in 2022: [31]9:43 - A brief analysis by Bloomberg on how decoupling following Brexit has disproportionately affected the UK economy: [11]10:36 - Academic paper examining the delay between monetary policy implementation and impact: [32]11:19 - Article noting the unprecedentedly aggressive policy tightening done by Central Banks: [33]12:25 - Research institute analyses the impact of fiscal responses to the pandemic and how it resulted in structural changes in the global economy: [17]12:37 - The IMF’s analysis on how external events such as Russia’s invasion of Ukraine contributed to inflation: [6]13:52 - World Bank article on the supply disruption and subsequent inflation in Pakistan following the 2022 floods: [34]14:06 - United Nations highlights the vulnerability of supply from increasing extreme weather events: [35] 15:52 - Emerging trends of deglobalisation and militarisation are highlighted in this IMF report: [19]Further recommended readings:[13]: A further analysis of whether Quantitative Easing, a particularly controversial tool for monetary expansion which was widely used for COVID-era stimulus, contributed to inflation or not.[14]: A Bank of Japan report on what Quantitative Easing as a tool is used to address in the Economy (Note: compare it to the state of the global economy in 2020 - is it applicable?) [18]: An assessment of the impact of fiscal policy on the Post-COVID inflation surgeReferences[1]: Höflmayr, M. (2022). Inflation explained: What lies behind and what is ahead? [2]: Historical inflation data for the countries of interest, 1971-2023 (All sources and economic data are aggregated in this spreadsheet)[3]: Koranyi, B. & Canepa, F. (2023, June 27). ECB's Lagarde sees no rate peak call near-term. Reuters. [4]: Summers, L. (2021, May 20). Larry Summers Worried About Inflation. Harvard Kennedy School [5]: Schasfoort, J. (2023, September 30). Why Inflation is Coming Down So Fast. Www.youtube.com. [6]: Binici, M., Centorrino, S., Cevik, S., & Gwon, G. (2022). Here comes the change: The role of global and domestic factors in post-pandemic inflation in Europe. IMF Working Papers, 2022(241)[7]: Martinez, L. R. (2017). How Much Should We Trust the Dictator’s GDP Estimates? SSRN Electronic Journal[8]: Barsky, R. B., & Kilian, L. (2001). Do We Really Know That Oil Caused the Great Stagflation? A Monetary Alternative. NBER Macroeconomics Annual, 16, 137–183. [9]: 連合、賃上げ目標「5%以上」　24年春季交渉「5%程度」から変更 / Japan’s National Trade Union changes its target wage growth from “Around 5%” to “More than 5%” (2023, October 18) [10]: Koester, G., Gonçalves, E., Gomez-Salvador, R., Doleschel, J., Andersson, M., Pardo, B. G., & Lebastard, L. (2023). Inflation developments in the euro area and the United States. European Central Bank. [11]: Rees, T. (2023, June 5). Why Is UK Inflation so High and When Will It Fall? Bloomberg.com; Bloomberg. [12]: Wessel, D., & Milstein, E. (2021, December 17). What did the Fed do in response to the COVID-19 crisis? Brookings. [13]: Armstrong, R. (2022, July 19). Did QE cause inflation? @FinancialTimes; Financial Times. [14]: Bank of Japan. (2001). New Procedures for Money Market Operations and Monetary Easing: Bank of Japan. Archive.org. [15]: Calhoun, G. (2023, March 6). What Is 'Transitory Inflation'? The Facts. Forbes.[16]: Business Insider. (2023, December 13). Inflation Is Permanent and You'll Never Regain Your Lost Purchasing Power, Says a Wall Street Guru.[17]: CEPR. (2022, March 1). Demand-supply imbalance during the COVID-19 pandemic: The role of fiscal policy. VoxEU. [18]: Dao, M. C., Dizioli, A., Gourinchas, P. -O., Jackson, C., & Leigh, D. (2023). Unconventional Fiscal Policy in Times of High Inflation. Paper presented at the European Central Bank Forum on Central Banking, Sintra, Portugal, June 25–28.[19]: International Monetary Fund. (2023). World Economic Outlook: Navigating Global Divergences. Washington, DC. (Chapter 2)[20]: MacKinnon, J. (2022, February 11). Inflation is back - is it transitory or will it last? Financial Pipeline. [21]: Adrian, T. (2023, May 15). The Role of Inflation Expectations in Monetary Policy. IMF. [22]: Santacreu, A., Young, H., & de Soyres, F. (2022, March 1). Demand–supply imbalance during the Covid-19 pandemic: The role of fiscal policy. CEPR. [23]: Stiglitz, J. E. (2021, June 24). US Inflation: A Red Herring. Project Syndicate. [24]: Schneeweiss, Z. (2021, October 16). ECB’s Lagarde Says Inflation Spike Is “Largely Transitory.” Bloomberg.com; Bloomberg. [25]: Trading Economics. (2023). United States Fed Funds Interest Rate. Tradingeconomics.com. [26]: OECD. (2020). Government support and the COVID-19 pandemic. OECD Policy Responses to Coronavirus (Covid-19). [27]: OECD. (2023). Demography - Working age population - OECD Data. OECD. [28]: Makita, T. (2022). Restoring Japan’s Economic Competitiveness -Regeneration and adaptation to globalization and digitalization is essential. In Japan Research Institute. [29]: Glover, A., Mustre-del-Rio, J., & von Ende-Becker, A. (2023, January 12). How Much Have Record Corporate Profits Contributed to Recent Inflation? Kansascityfed.org. [30]: Bounds, A. (2021). Financial Times. FinancialTimes. [31]: Tajitsu, N. (2022, December 9). British Pound (GBP/USD) Went on a Wild Ride Close to Dollar Parity in 2022. Bloomberg.com; Bloomberg. [32]: Tomáš Havránek, & Marek Rusnák. (2012). Transmission Lags of Monetary Policy: A Meta-Analysis. RePEc: Research Papers in Economics, 9(4). [33]: Aldrick, P. (2022, January 27). Fed Kicks Off Most Aggressive Global Tightening in Decades. Bloomberg.com; Bloomberg. [34]: World Bank Group. (2022, October 6). World Bank: Pakistan’s Economy Slows Down While Inflation Rises Amid Catastrophic Floods. World Bank; World Bank Group. [35]:United Nations. (2023, July 14). Extreme weather highlights need for greater climate action. UN News. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

In this podcast we discuss inflation in the euro-zone and how best to tackle this. As the stability of the economies and with that inflation rates differ profusely within the euro-zone it can be difficult to tackle inflation in all the countries at once. We dive deeper into the monetary policy set by the European Bank and how member states can back this up by using fiscal policy, particularly in cases when the inflation rate is higher than in other countries within the euro-zone. For more information on relevance in the news see the following sources:https://www.ecb.europa.eu/pub/economic-bulletin/focus/2022/html/ecb.ebbox202204_01~68ef3c3dc6.en.htmlhttps://apnews.com/article/europe-inflation-economic-growth-236390a5ae8309d17779b03d0a863c08 https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Inflation_in_the_euro_areaFor more information on Inflation in general see the following sourceshttps://corporatefinanceinstitute.com/resources/economics/headlineinflation/#:~:text=The%20headline%20inflation%20figure%20includes https://www.investopedia.com/insights/what-is-the-quantity-theory-of-money/ For more information on monetary policy and the ECB see the following sources: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Inflation_in_the_euro_areahttps://european-union.europa.eu/institutions-law-budget/institutions-and-bodies/search-all-eu-institutions-and-bodies/european-central-bank-ecb_en#:~:text=The%20European%20Central%20Bank%20 For more general  information on fiscal policies in the eurozone see the following sources: https://www.ecb.europa.eu/pub/economic-bulletin/articles/2023/html/ecb.ebart202302_01~2d46eff8f.en.html https://www.rabobank.com/knowledge/d011370092-eurozone-inflation-differentials-likely-t-stick-aroundhttps://econofact.org/fiscal-policy-disinflation-and-the-safety-net For more information on the Netherlands see the following sourceshttps://www.dnb.nl/en/general-news/press-release-2023/economic-growth-slows-inflation-rmains-persistent/ https://www.acm.nl/en/publications/acm-warns-about-fixed-contracts-prices-above-price-ca#:~:text=The%20maximum%20prices%20of%20the https://www.government.nl/topics/energy-crisis/cabinet-plans-price-cap-for-gas-and-electricy https://www.cpb.nl/en/energy-price-scenarios#:~:text=In%20the%20 https://www.government.nl/latest/news/2022/03/21/measures-to-cushion-impact-of-rising-enrgy-prices-and-inflation For more information on Lithuania see the following sources: https://doi.org/10.5089/9798400254048.002.A001 https://www.lrt.lt/en/news-in-english/19/1739395/inflation-in-lithuania-higher-because-its-economy-did-better-during-pandemic-minister says#:~:text=%E2%80%9CGoods%20such%20as%20energy%2C%20transport References (APA format)Adolfsen, J. F., Kuik, F., Lis, E. M., & Schuler, T. (2022). The impact of the war in Ukraine on euro area energy markets. Www.ecb.europa.eu, 4. https://www.ecb.europa.eu/pub/economic-bulletin/focus/2022/html/ecb.ebbox202204_01~68ef3c3dc6.en.html Autoriteit Consument & Markt. (2023, September 7). ACM warns about fixed contracts with prices above the price cap | ACM.nl. Www.acm.nl. https://www.acm.nl/en/publications/acm-warns-about-fixed-contracts-prices-above-price-cap#:~:text=The%20maximum%20prices%20of%20the Bańkowski, K., Bouabdallah, O., Checherita-Westphal, C., Freier, M., Jacquinot, P., & Muggenthaler, P. (2023). Fiscal policy and high inflation. Www.ecb.europa.eu. https://www.ecb.europa.eu/pub/economic-bulletin/articles/2023/html/ecb.ebart202302_01~2bd46eff8f.en.html Barone, A. (2022, November 23). What is the Quantity Theory of Money? Investopedia. https://www.investopedia.com/insights/what-is-the-quantity-theory-of-money/ Bonnell, C. (2023, November 30). Inflation in Europe falls to 2.4% as interest rates pack a punch. But the economy has stalled. AP News. https://apnews.com/article/europe-inflation-economic-growth-236390a5ae8309d17779b03d0a863c08 Economic growth slows, inflation remains persistent. (2023, June 19). Www.dnb.nl. https://www.dnb.nl/en/general-news/press-release-2023/economic-growth-slows-inflation-remains-persistent/ Energy price scenarios. (2022, December 6). Www.cpb.nl. https://www.cpb.nl/en/energy-price-scenarios#:~:text=In%20the%20 European Central Bank. (2022). Fiscal policies. European Central Bank. https://www.ecb.europa.eu/mopo/eaec/fiscal/html/index.en.html European Union. (n.d.). European Central Bank (ECB) | European Union. European-Union.europa.eu. Retrieved December 20, 2023, from https://european-union.europa.eu/institutions-law-budget/institutions-and-bodies/search-all-eu-institutions-and-bodies/european-central-bank-ecb_en#:~:text=The%20European%20Central%20Bank%20 Eurostat. (2023). Inflation in the Euro Area - Statistics Explained. Ec.europa.eu. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Inflation_in_the_euro_area Gaspar, V., Goncalves, C., & Poplawski-Ribeiro, M. (2023, November 2). Fiscal Policy, Disinflation, and the Safety Net | Econofact. Econofact.org. https://econofact.org/fiscal-policy-disinflation-and-the-safety-net Harn, M. W., Elwin de Groot, Erik-Jan van. (2023, June 1). Eurozone inflation differentials likely to stick around. Rabobank. https://www.rabobank.com/knowledge/d011370092-eurozone-inflation-differentials-likely-to-stick-around Headline Inflation. (n.d.). Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/economics/headline-inflation/#:~:text=The%20headline%20inflation%20figure%20includes Inflation in Lithuania higher because its economy did better during pandemic, minister says. (2022, July 15). Lrt.lt. https://www.lrt.lt/en/news-in-english/19/1739395/inflation-in-lithuania-higher-because-its-economy-did-better-during-pandemic-minister-says#:~:text=%E2%80%9CGoods%20such%20as%20energy%2C%20transport International Monetary Fund European Dept. (2023). Republic of Lithuania: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Lithuania. IMF Staff Country Reports, 2023(316).  https://doi.org/10.5089/9798400254048.002.A001 Kang, S. H., Arreola Hernandez, J., & Seong-Min, Y. (2019). https://lib.uva.nl/discovery/fulldisplay?&context=PC&vid=31UKB_UAM1_INST:UVA&search_scope=DN_and_CI_and_PURE&tab=Everything&docid=cdi_hal_primary_oai_HAL_hal_02430651v1. Lib.uva.nl. https://lib.uva.nl/permalink/31UKB_UAM1_INST/1hfh82p/cdi_hal_primary_oai_HAL_hal_02430651v1 Ministerie van Algemene Zaken. (2022a, March 21). Package of measures to cushion the impact of rising energy prices and inflation - News item - Government.nl. Www.government.nl. https://www.government.nl/latest/news/2022/03/21/measures-to-cushion-impact-of-rising-energy-prices-and-inflation Ministerie van Algemene Zaken. (2022b, October 30). Cabinet plans price cap for gas and electricity - Energy crisis - Government.nl. Www.government.nl. https://www.government.nl/topics/energy-crisis/cabinet-plans-price-cap-for-gas-and-electricity Oner, C. (2023). Inflation: Prices on the Rise. International Monetary Fund; International Monetary Fund. https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Inflation  This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

In this podcast, we explore the battle against inflation and how we can use AI and pre-existing policies to combat this ongoing economic problem. With the help of three experts from Björn’s Ph.D. economics program, we discuss the impact of artificial intelligence alongside demand and supply-side policies to bring down one of the biggest concerns in our economy: inflation. As experts, we navigate this problem and how we can shape economic policies to define our future economies in the best way possible.ReferencesAI may start to boost US GDP in 2027. (2023, November 7). Goldman Sachs. https://www.goldmansachs.com/intelligence/pages/ai-may-start-to-boost-us-gdp-in-2027.htmlBank, E. C. (2023, September 22). Disinflation and monetary policy in the euro area. European Central Bank. https://www.ecb.europa.eu/press/key/date/2023/html/ecb.sp230922~3104733830.en.htmlContributors to Wikimedia projects. (2023, December 14). 2021–2023 inflation. Wikipedia. https://en.wikipedia.org/wiki/2021%E2%80%942022_inflation_surgeDas, D., Sarkar, A., & Debroy, A. (2022). Impact of COVID‐19 on changing consumer behaviour: Lessons from an emerging economy. International Journal of Consumer Studies, 46(3), 692–715. https://doi.org/10.1111/ijcs.12786Department, I. M. Fund. C. (2023). Finance & development, december 2023: Artificial intelligence: What AI means for economics. International Monetary Fund. https://www.imf.org/en/Publications/fandd/issuesFrankel, J. (2022, June 21). Op-Ed: How liberalizing economic trade could reduce inflation and supply chain woes. Los Angeles Times. https://www.latimes.com/opinion/story/2022-06-21/trade-inflation-tariffs-supply-chainHannam, P. (2023, March 6). Interest rate rises: Is there a less painful way to curb inflation? The Guardian. https://www.theguardian.com/australia-news/2023/mar/07/interest-rate-rises-is-there-a-less-painful-way-for-the-rba-to-curb-inflationHanna N. Gueorguiev and R. Nakatani. (2021, November 28). International Monetary Fund. Retrieved December 17, 2023, from https://www.imf.org/en/Blogs/Articles/2021/11/18/sharing-the-gains-of-automation-the-role-of-fiscal-policyMoufakkir, M. (2023, September 28). Careful embrace: AI and the ECB. European Central Bank. https://www.ecb.europa.eu/press/blog/date/2023/html/ecb.blog230928~3f76d57cce.en.htmlNapolitano, E. (2023, June 2). AI eliminated nearly 4,000 jobs in May, report says. CBS News. https://www.cbsnews.com/news/ai-job-losses-artificial-intelligence-challenger-report/Ricadela, A. (2023, December 8). Supply chain and inflation: Issues and impacts. Oracle. https://www.oracle.com/scm/supply-chain-inflation/Smith, N. (2022, January 29). Inflation-fighting as a multi-decade project. Noahpinion. Sun, M. (2023, December 8). Young Global Leaders’ insights on artificial intelligence. World Economic Forum. https://www.weforum.org/agenda/2023/12/artificial-intelligence-young-global-leaders/?utm_campaign=social_video_2023&utm_content=32863_AI_FOMO&utm_medium=social_video&utm_source=igTaylor, H. (2023a, July 17). Can we beat inflation by growing the economy? Investors’ Chronicle. https://www.investorschronicle.co.uk/news/2023/07/17/can-we-grow-the-economy-to-beat-inflation/Why innovation could stop inflation. (n.d.). Retrieved December 17, 2023, from https://www.ft.com/content/57bccc8f-e75d-4be6-a92e-96470aa7e7deWile, R. (2023, July 26). Federal Reserve raises interest rates to highest point in more than 20 years. NBC News. https://www.nbcnews.com/business/economy/interest-rate-hike-july-2023-how-much-higher-federal-reserve-rcna96210Woodman, A. (2017, December 14). Japan cuts corporate tax to spur growth, investments. Global Finance Magazine. https://gfmag.com/features/japans-corporate-tax-reform-abe-government/Xanthe B. Gabrielle-Beacher. (2022, July 29). Can innovation curb inflation? Mysite. https://www.commercialawjournal-bpp.com/post/can-innovation-curb-inflationYagi, M., & Managi, S. (2023). The spillover effects of rising energy prices following 2022 Russian invasion of Ukraine. Economic Analysis and Policy, 77, 680–695. https://doi.org/10.1016/j.eap.2022.12.025 This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

In this podcast, we introduce inflation rates in the United States and the United Kingdom through a comparative lens for the fiscal year 2023. Global inflation has risen sharply since the middle of 2020 due to numerous factors such as global demand, supply chain bottlenecks and soaring food and energy prices, especially since the Russian Federation invaded Ukraine. In both countries examined, the first half of 2023 was marked by high inflation, with the United States reaching a peak in June at 9.06% (the inflation rate has not been this high since the 1980s) and the United Kingdom having 10.4% in February. In order to understand the differences and similarities of the inflation rates between the two countries, we looked over the elements contributing to high inflation, and simultaneously studied the approaches governments from both countries implemented such as fiscal and monetary policies which helped offset the high levels of inflation.References15. Inflation, unemployment, and monetary policy. (n.d.). Www.core-Econ.org. https://www.core-econ.org/the-economy/v1/book/text/15.htmlBank of England. (2023). Monetary policy. Www.bankofengland.co.uk. https://www.bankofengland.co.uk/monetary-policy#:~:text=easing%20(QE).-Beckett, D. (2023, November 15). Consumer price inflation, UK - Office for National Statistics. Www.ons.gov.uk. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/october2023#:~:text=The%20CPIH%20inflation%20rate%20isHouse, T. W. (2023, August 16). FACT SHEET: One Year In, President Biden’s Inflation Reduction Act is Driving Historic Climate Action and Investing in America to Create Good Paying Jobs and Reduce Costs. The White House. https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/16/fact-sheet-one-year-in-president-bidens-inflation-reduction-act-is-driving-historic-climate-action-and-investing-in-america-to-create-good-paying-jobs-and-reduce-costs/#:~:text=The%20Inflation%20Reduction%20Act%20raisesSurico, P. (2023, July 20). Why is UK inflation so high? Www.thebanker.com. https://www.thebanker.com/Why-is-UK-inflation-so-high-1689843362The American Rescue Plan. (n.d.). https://www.whitehouse.gov/wp-content/uploads/2021/03/American-Rescue-Plan-Fact-Sheet.pdfUnpacking the Causes of Pandemic-Era Inflation in the US. (n.d.). NBER. Retrieved December 14, 2023, from https://www.nber.org/digest/20239/unpacking-causes-pandemic-era-inflation-us#:~:text=The%20combination%20of%20strong%20demandYCharts. (n.d.). US Inflation Rate. Ycharts.com. https://ycharts.com/indicators/us_inflation_rate#:~:text=US%20Inflation%20Rate%2       0is%20at This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

In this podcast we “explore this nexus between inequality and AI” from a variety of perspectives. With the help of two guests, a leading researcher from the International Finance Corporation and a former Chancellor of the Exchequer in the UK, we discuss why the impact of AI on inequality is an important issue to cover at this moment.Complete shownotes at https://tinyurl.com/3wzy6ayy  This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit aucfundamentalsofmacro.substack.com