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Interest rates aren’t the only way to fight inflation, which is soaring almost everywhere you look.
In the U.S., gas prices hit another fresh record as the summer travel season begins. In the U.K., rising food prices are pummeling poorer families, with the price of pasta 50% higher than a year ago, while potato chips and bread are up 15%. Inflation in the eurozone is the fastest since the currency union was created in 1999.
That’s why central banks like the Federal Reserve are in full inflation-fighting mode, hoping higher interest rates will cool off their economies. David McMillan, a finance professor at the University of Stirling, offers another way to tame inflation: encourage companies to invest in productivity.
“There are lots of economic benefits to raising productivity, but bringing down inflation is the one that everyone seems to have missed,” he writes.
As prices rise, wages aren’t keeping up. University of Leeds economist David Spencer explains why.
And Bruce Mountain, director of the Victoria Energy Policy Center in Australia, has some advice for consumers for how to prepare for the 1970s-era energy shock he expects is still unfolding.
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