Since the turn of the millennium, demand rather than supply has been a major constraint to economic growth. The fact of moderate inflation indicates that expenditures during this period rarely exceeded the productive capacity of the economy. The average annual inflation was only 1.8%, compared to 3.5% in the previous 20 years and 4.5% in the previous two decades. As an explanation for the chronically weak demand, economists cited several reasons: from the aging of the able-bodied population to the suppression of investment appetites caused by the slowdown in technological progress. It is assumed that inequality has also played an important role.
Since the turn of the millennium, demand rather than supply has been a major constraint to economic growth. The fact of moderate inflation indicates that expenditures during this period rarely exceeded the productive capacity of the economy. The average annual inflation was only 1.8%, compared to 3.5% in the previous 20 years and 4.5% in the previous two decades. As an explanation for the chronically weak demand, economists cited several reasons: from the aging of the able-bodied population to the suppression of investment appetites caused by the slowdown in technological progress. It is assumed that inequality has also played an important role.
Comments powered by CComment