Type up one - three articles about a current event that has to do with microeconomics. Have...

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Type up one - three articles about a current event that has to do with microeconomics. Have references as well.

Moumita · Accepted Answer

Running Head: INFLATION 		1
INFLATION 											5
INFLATION
Inflation 
	Inflation is the rise in the cost of products that is important for daily living such as food, clothes, household products etc. Inflation is caused by high demand that cannot be met by the supply, excess circulation of money leads to the value of money diminishing and higher levels of costs cause increase in labour costs. 
	The first article explores how COVID influences the Inflation. The easiest way to understand the economy and how the business cycles will be affected is through inflation. The inflation helps to determine whether it is the demand or the supply affecting the business cycle. In some cases, the demand is too high. In other cases, the demand is the same and supply has reduced potentially. The paper tries to forecast the behaviour of inflation due to the COVID-19 shock to the economy. The behaviour forecast is done through VAR. The variables used in VAR are unemployment, natural unemployment, core inflation, inflation, the real GDP, the per capita of hours worked in the economy, wage inflation and the labour share. 
	The previous business cycles from 1998 to 2019 are analysed. The predictions show that there will be a 16 percent increase in unemployment. The GDP will drop by 10 percent. The wage inflation and the labour share will drop as well according to the predictions. The business cycles seem to have been driven by the demand shock. This demand shock in the COVID era will cause a mild decrease in inflation.

Type up one - three articles about a current event that has to do with microeconomics. Have references as well.

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