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- Travelers in Salt Lake City International Airport last month. Air travel is still generally cheaper than it was a year ago, in contrast to some other goods and services that have had sharp rises in price.Credit...Rick Bowmer/Associated Press
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- Mohamed A. El-Erian is a Bloomberg Opinion columnist. He is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE, the parent company of Pimco where he served as CEO and co-CIO; and chair of Gramercy Fund Management. His books include "The Only Game in Town" and "When Markets Collide."
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The COVID-19 pandemic has caused an unconventional recession, and we do not expect the recovery will be typical either. While the paramount policy goals are to control the virus, get to full employment, and make the necessary investments for a more resilient and inclusive recovery, economic uncertainties and risks demand careful attention going forward. One risk the Administration is monitoring closely is inflation.
Inflation—or the rate of change in prices over time—is not a simple phenomenon to measure or interpret. Inflation that is persistently too high can hurt the wellbeing of households, especially when it is not offset by comparable increases in wages, leading to reduced buying power. But inflation that is persistently too low leaves monetary policy with less scope to support the economy and can be a sign the economy is below its capacity, thus with room to expand jobs further. Indeed, one piece of important context around the current inflation risks is that...
- Mohamed A. El-Erian is a Bloomberg Opinion columnist. He is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE, the parent company of Pimco where he served as CEO and co-CIO; and chair of Gramercy Fund Management. His books include "The Only Game in Town" and "When Markets Collide."
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