Please me reply to these two posts:

Post 1

Lisa Valenzuela posted Feb 3, 2024 11:31 PMSubscribe

The article that I chose, Global Inflation: A Worldwide Challenge, was written by German Lopez, published in The New York Times on July 26, 2022. This article explores the widespread issue of inflation, both in the United States and globally. It examines the causes of inflation, its global impact, and the challenges faced by its policymakers (Lopez, 2022).

The article highlights that inflation is not only limited to the U.S.; but also effects different countries globally. The data shows a 9.1% increase in U.S. consumer prices in the past year, with the European Union experiencing a higher 9.6% rise during the same period (Lopez, 2022).

Causes of inflation, are created from both supply and demand factors. Increased demand in the U.S., partly due to relief measures like the American Rescue Plan, which contributes significantly. While Europe faces supply chain disruptions from the war in Ukraine, which leads to a reduced reliance on Russian oil and gas (Lopez, 2022).

Relevant to Current Macroeconomic Policy:

1. International Inflation: The article highlights that inflation is a worldwide issue, and this aligns with global interdependence. The article also shares that policymakers need to consider global factors when creating macroeconomic policies (Krugman & Wells, 2020).
2. Inflation Causes and Policies: The article pinpoints that supply and demand factors contribute to inflation, creating increase in U.S. demand and supply chain interruptions in Europe (Lopez, 2020). Also, policy tools like fiscal and monetary policies address inflation. We should develop an understanding of its causes, and create effective responses (Krugman & Wells, 2020).
3. Global Economic Impact The article compares the inflation rates in the U.S. and the European Union, showcasing their different effects on economies (Lopez, 2020). Policy makers should consider the differences of the global economic metrics, to create better policies (Krugman & Wells, 2020).

This article helped me to understand how macroeconomic principles affect us daily. It also helped me to understand inflation's impact globally, and in turn, I reflected on how this effects my personal household. The global perspective also shows us how everything is connected economically.

Lisa Valenzuela

Post 2:

Donald Holmes posted Feb 3, 2024 1:31 AMSubscribe

I was unaware of the inflation crisis faced by Argentina and Turkey. In 2022, Argentina had just under 100% inflation and keeps the official currency exchange rates low due to low currency reserves. Argentina's central bank refuses to admit their is an inflation problem, and refuses to print bills with a larger denomination resulting in their largest bill only being worth about 3 USD. The result of such instability caused a poverty rates spike of 15% in just 5 years. Countries need to raise interest rates when facing inflation, but Turkey, did the opposite of this and lowered their rates to 9% which has never worked out in practice. Life is hard in these two countries for its citizens. It puts into perspective how bad things can get with high inflation rates, and the importance of a strong healthy economy, and why we should care. A lot of the decisions these countries made were done so by Presidents wanting to retain power versus do what is right for business and its people. Policy was heavily effected by these ambitions to stay in power. I think turkey should adopt increase their interest rates to counter inflation, and based off the amount of protest Turkey's had, the people would agree. Unfortunately, I'm not sure what Argentina would need to do. The podcast suggested flattening out the exchange rate. Building up its currency reserves should help as well.