Hi everyone,
Would appreciate some help here!
In the Economic Analysis book (capital market expectations) P54 Businesss cycle phases table says that inflation peaks in Recession, but on P55, it says that inflation declines in Recessions.
Why does inflation rise and ultimately peak in Recessions if the output gap closed already closed in the Late Upswing phase? In which case the gap is probably wider in the Slowdown and even wider in Recession?
Can someone please explain? Thanks!
Would appreciate some help here!
In the Economic Analysis book (capital market expectations) P54 Businesss cycle phases table says that inflation peaks in Recession, but on P55, it says that inflation declines in Recessions.
Why does inflation rise and ultimately peak in Recessions if the output gap closed already closed in the Late Upswing phase? In which case the gap is probably wider in the Slowdown and even wider in Recession?
Can someone please explain? Thanks!