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When there is lots of cash to spend it can cause the economy to overheat, in certain scenarios, leading to inflation. But the job losses
- When there is lots of cash to spend it can cause the economy to overheat, in certain scenarios, leading to inflation. But the job losses arising from the economic impact of the COVID-19 pandemic has resulted in a large gap between the economy's potential and actual output, the paper indicates.
- "In other words, the economy can make more stuff and hire more people without causing inflation," said a BOJ representative, who spoke on condition of anonymity. No comment on the paper was forthcoming from the central bank up to press time.
- "For the near term, the economy is expected to operate for the most part below capacity, which signals no inflationary pressures over this horizon. This has broader implications for wage setting, inflation expectations and monetary policy decisions in Jamaica," the author said.
Based on the article above, answer the following questions:
- Does this article indicate a positive or negative outlook for the Jamaican economy?Explain your response clearly.
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