— Let’s say the Central Bank stops sweden telegram data resorting to high rates, what then?
— Then inflation will remain high for a very long time. In this case, depositors and investors will definitely demand higher returns from businesses. Because of this, loans will become even more expensive. That is, the availability of long-term credit with high inflation will ultimately be less than with low inflation. And this is precisely what can harm long-term economic growth.
In reality, society has a choice between
stable growth with low inflation and constant ups and downs of the economy with high and highly variable inflation. For some time, the economy and prices can grow together; there are such examples. But eventually, prices will accelerate so much that they will seriously devalue both the income and savings of citizens. GDP growth will stop or change to its decline. As a result, over the long term, the result will be worse than if the economy had developed with low inflation.
— Why does the Central Bank compare the Russian economy to an overheated car?
To show that you can’t “squeeze
more out of the economy than it can give in its current state. You can only burn money in vain by overstimulating comparisons of iron, plastic pipes and wood demand. It’s like continuing to “step on the gas” when the engine is already at maximum speed, and the car is america email going up a steep hill. The engine will boil, you will stop. And what’s worse, you risk rolling back.