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This is not, alas, a temporary shock.
The original plan was to use the army only as a temporary shock force.
All they achieve with their attacks is our temporary shock and oppression, but then we become stronger and more united.
However, the high unemployment is an unavoidable temporary shock, since a large part of the workforce has to be reallocated away from construction.
So: when is it appropriate to get very concerned about inflation, and when is it OK to assume that a rise in prices is a temporary shock that will pass?
At the same time, the recession of 2009 is not associated with any regime of high variance; that is, it was a temporary shock.
Similar(48)
Central bankers should ignore such temporary shocks.
And there are some signs that the temporary shocks may have left a more lasting dent on the psyche of firms and shoppers.
It also glides over the difference between declining industries like telephone makers and those facing temporary shocks, like airlines after 9/11.
If consumers believe the central bank will keep inflation low, then they will not react to temporary shocks (such as high oil prices) by demanding higher wages.
The Bank says that a lot of recent inflation reflects temporary shocks: As regular readers might guess, I very much agree.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com