Read the assigned Forbes article and summarize in at least 100 words.
The Forbes Article states that a recession is extremely likely to hit, the article mentions how GPD is Q3 2022 has risen by 2.6%. There a roughly one-year time lag between monetary policy changes and real economic changes. There is data supporting a shorter-time lags as more than 54 other countries are also tightening their monetary policy. At the other end there might be a longer time lag due to the fact that people’s savings are declining by $90 Billion per month. There is also a decline in new home construction in November 2022. So, a summary of this article is that economist do not really know what is going on but it is okay, they do not need to be.
Reflect on what we learned in the course, find at least one chapter in the textbook where we discuss the related topic, and explain how the chapter(s) is related to the reported event in the article. Do this in at least 100 words.
One thing I’d like to talk about what we learned in class this year is that there are time lags in Monetary Policy. In the book this discussed in the beginning of the book in chapter 3. This is important to understand because how slow or fast the time lag can depend on how severe a recession will be but also to never expect immediate results from the Federal Reserve’s decision today. This connects to the article, because the article talks about the two reasons why we might have shorter time lag than normal than also gives evidence on why it might be a longer time lag.