Sunday, May 25, 2008
Sometimes it seems that the graphic artists at The Economist are a wee bit sharper than the magazine's writing staff, particularly in the area of, uh, economics. Take note of the guy with the huge nose in the middle of the cover above who complains, "It seems the price of everything is going up!!!"
There are two stories in the current issue about inflation, however, as might be expected when the authors are economists, you get the standard take on inflation in the West in the cover story Inflation's back:
By slashing interest rates as inflation has climbed, has the Fed sowed the seeds of a new inflationary era? That case looks hard to prove in the rich world. Inflation rates of 3.9% in America and 3.3% in the euro area are far higher than central banks want, and inflation expectations are rising. If growth in the euro area remains robust, the ECB should certainly worry more about inflation. Yet so far there is little sign that higher food and oil prices are pushing up other prices in the rich economies.Yes, inflation at three or four percent pales in comparison to what we saw back in the 1970s but the way the inflation number is calculated also pales in comparison.
The other report An old enemy rears its head deals with inflation in emerging economies and while I haven't gotten around to reading that one yet, I'll add to this post sometime later today if anything interesting appears.
That's one of the best magazine covers in quite some time.
This week's cartoon: