Assignment - Essay Topic and Requirements
The article that forms the basis for this assignment is: Fensom, A. 2017, "Is the deflation bugbear heading down under?", Morning Star, 10 October.
Your task is to use the knowledge that you have gained in this course (including the additional recommended readings at the end of this file) to demonstrate a thorough understanding of the issues raised in this article.
Q1. In the article,
"Is the deflation bugbear heading down under?" (Fensom 2017), economist Paul Dales is quoted as saying, "an average inflation rate of around 2 per 2 cent or below could mean that many economies, including Australia, are just one recession away from deflation.
In other words, the next economic shock might not need to be very large to push inflation below zero".
Explain the connection between recession and inflation. Why is deflation so dreaded? Comment by drawing on the experiences of other countries that have experienced deflation.
Q2. In the article, "Is the deflation bugbear heading down under?" (Fensom 2017) leverage dynamics are discussed. Use this as a starting point to explain how leverage matters for the economy.
Attachment:- Assignment File.rar