Pandemic Upends Economic Assumptions as Inflation Soars, Recession Avoided
• Experts thought they understood the economy, but the pandemic overturned basic assumptions about recessions, inflation, interest rates, etc.
• There are debates about what caused high inflation, but most agree government pandemic spending boosted demand.
• Contrary to forecasts, no recession occurred despite high interest rates and inflation.
• Key economic relationships between employment, inflation and interest rates have been severed.
• Corporations are extremely profitable, but public economic mood remains negative.