Contrary to expectation, the result was low-inflation and higher-economic growth. The Coronavirus Aid, Relief, and Economic Security Act also known as CARES Act ‘juiced’ earnings when the economy would have otherwise suffered greatly when COVID lockdowns were put in place. Many economists contribute the rise in GDP to the $2.2 trillion economic stimulus bill passed by Congress on March 27, 2020. Gross Domestic Product-GDP (the measure used to determine economic growth) is rising. It’s just right.Ĭurrently, inflation is not a factor as it remains under control. Like the story goes, the Goldilock’s economy is not too hot or too cold. The best scenario would be the Goldilock’s economy of low-inflation and higher-economic growth. The phrase Goldilock’s was coined by David Shulman of Solomon Brothers who wrote “The Goldilocks economy: Keeping the Bears at Bay” in March 1992. We saw this in the mid-to-late 1990s when productivity was hitting its stride and inflation was on a slow and steady decrease. GOLDILOCKS is low-inflation and higher-economic growth.The end result was supply-side economics, trickle-down spending, and a growing budget deficit. In the 1980s, President Reagan lowered taxes so consumers would increase spending. The GO-GO economy has high-inflation and higher-economic growth.consumers started buying Japanese and German cars for their better gas mileage. ![]() manufacturing started to move overseas which negatively affecting U.S. Inflation grew rapidly for a few reasons: 1) the oil embargo which caused oil prices to increase 387%, 2) the ongoing costs of the Vietnam war, and 3) the expanding social programs. It was a time of high-inflation and slower-economic growth. experienced deflation between 19, during the Great Depression. The DEFLATION economy has low-inflation and slower-economic growth which pushes prices down causing people to delay spending because they think there will be a better deal tomorrow.Over the years, economists have defined four types of economies: 2021 has arrived and after a devastating year, it has us all wondering what type of economy awaits us.
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