Recession Is Needed to Curb Inflation

Recession Is Needed to Curb Inflation
People shop during Black Friday in Santa Anita within the city of Arcadia, Calif., on Nov. 25, 2022. Frederic J. Brown/AFP via Getty Images
Law Ka-chung
Updated:
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Commentary

The year 2023 seems a turnaround year for the world economy: Not only in the real estate sector, where prices are on the rebound. Indeed, inflation and the interest rate hike will still be the focus, at least for the first half of 2023; recession, if any, should be later. The picture is getting clearer: inflationary pressure stems mainly from the strong labour and spending markets. Nevertheless, it is unclear whether the current policy stance is restrictive enough to bring inflation down meaningfully. The actual reason behind this is the monetary policy is very slow in transmission.

Law Ka-chung
Law Ka-chung
Author
Law Ka-chung is a commentator on global macroeconomics and markets. He has been writing numerous newspaper and magazine columns and talking about markets on various TV, radio, and online channels in Hong Kong since 2005. He covers all types of economics and finance topics in the United States, Europe, and Asia, ranging from macroeconomic theories to market outlook for equities, currencies, rates, yields, and commodities. He has been the chief economist and strategist at a Hong Kong branch of the fifth-largest Chinese bank for more than 12 years. He has a Ph.D. in Economics, MSc in Mathematics, and MSc in Astrophysics.
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