The past few rounds of inflation reflects the support of monetary expansion, which is not the case for the current round, said CF40 Senior Fellow Zhang Bin, 1/7 mp.weixin.qq.com/s/x4MFB_mc_1sj…
In the past few rounds, the prices of food, non-food and PPI have generally increased, while this round is characterized by a #Pork-driven rise in food price, and prices of other goods and services have generally fallen. 2/7
The main reason for the past few rounds of inflation is that demand is too strong, and this round of #CPI rise is a supply shock. 3/7
In this case, monetary policy-making should not refer too much to CPI, but should consider price indicators that could reflect the price level more comprehensively and are less affected by the supply shock, such as core CPI, #PPI and #PMI. 4/7
The sustained sluggish price level and economic prosperity degree indicate that the current economic growth rate is below the potential rate and the economy is challenged by insufficient aggregate demand. 5/7
The key to the counter-cyclical management policy is to stimulate the growth of credit demand, which can be started from the following aspects: lower interest rates; the normalization of real estate enterprises and housing mortgage policies. 6/7
Moreover, to ensure the reasonable growth of government debt and infrastructure investment; adhere to the current direction of exchange rate reform and policy arrangements for helping migrants settle down in cities .7/7
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