2 papers analyzed
These studies suggest that rising inflation can exacerbate a recession by increasing economic instability and shifting company priorities from growth to debt repayment.
The relationship between rising inflation and economic recessions is a complex and multifaceted topic in economics. Inflation, defined as a general rise in the price level of goods and services in an economy, can have both positive and negative effects. This synthesis aims to explore whether rising inflation can cause a recession by analyzing insights from multiple research papers.
Inflation and Economic Stability:
Inflation and Recession Dynamics:
Rising inflation can contribute to economic instability and potentially lead to a recession, especially when it is driven by excessive money supply growth or fiscal policies that increase production costs. However, the relationship is not straightforward, as low and steady inflation can actually help mitigate the severity of recessions. The case of Brazil in 2015 illustrates that specific types of inflation, combined with other economic factors like corporate debt, can severely aggravate a recession.
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