Inflation in the price of vote buying in Uganda … isn’t really inflation. The price of potassium iodide pills went up faster than any economy has ever done with the exception of Hungary in 1946 … and that’s not caused by monetary inflation either. Clever commenter “david” points out that when his local coffee shop increased the price from $0.95 to $1.05 between his purchase of two cups, the “inflation” rate was even faster.
FAO is hosting a series of workshops to help countries devise better strategies to deal with high food prices.
Sumner on learning from history
Most economists have in the back of their mind the idea that Keynes showed monetary policy was ineffective at the zero bound during the Great Depression. How many of these economists know that by the end of 1933 (with near 25% unemployment) Keynes was complaining that FDR’s monetary policy was too inflationary.More on monetary policy and the business cycle (K Smith via Sumner):
keep always in the front of your mind that a recession is not simply a series of unfortunate events. A recession is when the economy produces less. For example, the AIDS epidemic in Botswana is a horrible event for millions of people that uprooted lives and destroyed families and promises to leave a generation of orphans.
However, Botswana’s GDP growth didn’t turn negative until Lehman Brothers went under.That a Global Financial Crisis could do what rampant death and disease could not, is an important indicator of the nature of recession.
Supporting this notion is … the history of natural disasters in Asia??
The tsunami of December 2004 and the Kashmir earthquake of October 2005 involved death and destruction on an even wider scale, yet had virtually no impact on growth rates. That was largely because the victims were mostly poor people who added little to GDP. But even the Kobe earthquake of 1995—the second-biggest ever to hit a modern urban area—had a surprisingly modest effect (see article). Within 15 months industrial production in Kobe had almost reached pre-quake levels, and Japan as a whole suffered only one quarter of declining output.