The high inflation of recent years can be compared to the 1970s, although it was a very different economy. Central banks raised interest rates in both periods to contain the headline rate. In contrast to the past, food inflation has not eased this time around. This article will address the underlying reasons.
During 2022, the prices of goods and services (global %) experienced an increase, which has generated social unrest in several countries. Central banks raised their rates to control the price rise, discouraging investment, reducing consumption and increasing concerns about a recession. Meanwhile, food prices continue to rise. This article discusses the inadequacy of monetary policy to control rising costs.
In the first days of September 2023, just over a dozen countries have experienced severe rainfall, causing human and material losses. At least one country on each continent was affected by flooding. It is common for this type of natural disaster to hit these places. However, it is unusual for it to happen at the same time. Climate change is the main culprit for the damage already done and the rise in prices due to reduced harvests and business closures.
