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In all honesty, I never knew government shutdowns were a thing. The idea that, in the 21st century, a nation's operations could grind to a halt due to budgetary hiccups seemed almost surreal. Yet, here we are, on the verge of another potential standoff in Congress, with a looming October 1, 2023 deadline. It's a scenario rooted in legal intricacies dating back to the Antideficiency Act of 1884, a law amended in 1950 that asserts federal agencies can't spend a dime without Congress's nod. When those crucial 12 appropriations bills don't get the green light, we find ourselves in the midst of a government shutdown. But what exactly transpires during these episodes? Some federal employees find themselves on an unplanned hiatus, though rest assured, they'll eventually receive their well-deserved paychecks retroactively. Meanwhile, essential services like air traffic control and law enforcement soldier on, even if the paychecks momentarily pause. Every year, Congress faces the task of approving a dozen appropriation bills that dictate the financial allocations for a diverse range of federal agencies and programs. These bills cover crucial facets of government operations, from the salaries and benefits of federal employees to grants for local and state governments, and even acquisitions from private enterprises. As per federal statute, all 12 appropriation bills should be ratified before the dawn of a new fiscal year, which officially kicks off on October 1. If this deadline slips through the cracks, and a provisional measure to sustain operations isn't put in place, we're faced with the possibility of a full or partial shutdown. Now, you might be curious about which federal departments and agencies fall under the umbrella of each appropriation bill. For fiscal year 2023, only about a quarter of the projected spending stems from the 12 appropriation bills that were greenlit back in December 2022. The rest, encompassing mandatory spending and net interest, is governed by permanent laws that typically don't go through the annual appropriation process. This means that the funds allocated through the appropriation bills only make up about 25 percent of federal spending in 2023. To grasp how this process unfolds in Congress, it kicks off with the adoption of a budget resolution, which sets the overarching spending cap (known as 302a allocations) for the upcoming fiscal year. Subsequently, the House and Senate Committees on Appropriations distribute this total across their respective 12 subcommittees. Guided by these allocations, each subcommittee then crafts its own appropriation bill, and this whole process is replicated in both chambers. The 12 appropriation bills: 1. **Agriculture** - Covers funding for the Department of Agriculture (except Forest Service) and the Food and Drug Administration, ensuring support for agricultural programs and food safety regulations. 2. **Commerce, Justice, and Science** - Encompasses funding for the Department of Commerce, Department of Justice, NASA, and the National Science Foundation, supporting various scientific research and law enforcement activities. 3. **Defense** - Addresses funding for the Department of Defense (excluding Military Construction), providing resources for national defense and military operations. 4. **Energy and Water** - Covers funding for the Department of Energy, Corps of Engineers, and Bureau of Reclamation, ensuring support for energy programs and water resource management. 5. **Financial Services** - Includes funding for the Department of Treasury, District of Columbia, Executive Office of the President, and Judicial Branch, supporting financial oversight and government operations. 6. **Homeland Security** - Provides funding for the Department of Homeland Security, ensuring resources for border security, immigration enforcement, and emergency response. 7. **Interior and Environment** - Encompasses funding for the Department of the Interior (except Bureau of Reclamation), Forest Service, Indian Health Service, and Environmental Protection Agency, supporting conservation efforts and environmental protection. 8. **Labor, HHS, and Education** - Covers funding for the Department of Labor, Department of Health and Human Services (excluding FDA and Indian Health Service), Department of Education, and Social Security Administration, ensuring support for labor, health, and education programs. 9. **Legislative Branch** - Addresses funding for the operations of the U.S. Congress, ensuring resources for legislative activities. 10. **Military Construction and VA** - Encompasses funding for Military Construction and the Department of Veterans Affairs, providing resources for military infrastructure and veteran services. 11. **State and Foreign Operations** - Provides funding for the Department of State and the Agency for International Development, supporting U.S. foreign policy and international development efforts. 12. **Transportation and HUD** - Covers funding for the Department of Transportation and the Department of Housing and Urban Development, ensuring support for transportation infrastructure and housing programs. These bills collectively shape the financial framework of the federal government, addressing a wide range of crucial areas that impact the nation. Now back to what interests me the most… how is this going to affect the economy? A government shutdown might not seem like a blockbuster for the economy, especially in the short term. But if it stretches on, that's when things start getting dicey. Alright, let's talk numbers. The cost of a shutdown largely depends on how long it lasts. The most recent one in 2018-19 lasted a whopping 34 days, delaying over $18 billion in spending. And that's money that only got rolling again once the government reopened. In total, it set the nation back $11 billion at the time, with about $3 billion lost for good, according to the Congressional Budget Office. That 2018-19 shutdown didn't do any favors for U.S. economic growth either. It dealt an $8 billion blow to the real gross domestic product, or about a 0.2% loss. Fast forward to today, and the Bipartisan Policy Center's crystal ball predicts a shutdown could cost over a billion dollars a week. Alright, what about Wall Street? Surprisingly, past shutdowns haven't sent the markets on a rollercoaster ride. Investors generally expect the government to sort itself out eventually. So, they don't usually hit the panic button based on headlines from Capitol Hill. In fact, during the last two shutdowns, the S&P 500 actually saw gains – about 10% in 2018-19 and 3% in 2013. Now, let's talk about the Federal Reserve. Their Chairman Jerome Powell mentioned that shutdowns typically don't have a huge impact on the economy. But here's the twist: the Fed relies heavily on government reports to steer interest rates. If those reports are MIA due to a shutdown, it's like navigating with a blindfold on. This could ruffle the feathers of an already-sensitive inflation situation. So, while a short government shutdown might not trigger alarm bells for the economy, a prolonged one? That's when the plot thickens, and not in a good way. Here's hoping Congress can whip up a budgetary masterpiece before the clock strikes midnight! Resources: HOW DO THE HOUSE AND SENATE APPROPRIATION BILLS DIFFER? What is a government shutdown? A short government shutdown...

Step into a world where candy canes grow like trees and chocolate rivers flow. Yes, I’m talking about the enchanting realm of Willy Wonka's Chocolate Factory. Beyond the candies and inventions, there lies an economic backdrop. But don't worry, we won't be crunching numbers or diving into dry theories. Instead, picture this as a leisurely stroll through a candy-filled wonderland, where economics wears a top hat and a twinkle in its eye. Scarcity: Economics is known as the study of scarcity, and in the movie, it is as golden as the tickets themselves. With only five golden tickets hidden in millions of Wonka Bars, the scarcity of these passes drives a frenzied search among eager children and their even more eager parents. This scarcity is a fundamental economic principle, illustrating how limited resources, in this case, the tickets, create high demand and increased value. Some would buy hundreds at a time in hopes of just one ticket. Supply Chain: Behind the magical facade of the factory lies a meticulously designed supply chain. From the delivery of cocoa beans to the final packaging of scrumptious candies, every step is a testament to efficient production methods. Just as in any industry, optimizing the production process ensures that resources are utilized effectively, reducing waste, and maximizing output. Innovation-Research-Development: The eccentric chocolatier, Willy Wonka, emulates the role of an innovator in the business world. His endless imagination gives birth to crazy creations like the Fizzy Lifting Drinks. This mirrors the real-world concept of research and development (R&D), where companies invest to stay ahead in the market. Pricing Strategies: From the humble Wonka Bars available to all to the exclusive Everlasting Gobstoppers, each product is strategically priced. The real-world practice of price differentiation is done to cater to different segments of the market. The affordability of some products ensures accessibility for a wide consumer base, while premium items like the Gobstoppers create an aura of luxury. It's a delicate balance that maximizes both revenue and consumer satisfaction. Market Competition: The presence of rival candy makers like Slugworth introduces an element of competition, a cornerstone of any market economy. In the race to create the most innovative and delectable sweets, businesses are spurred on to outperform each other. This dynamic not only fuels creativity and quality but also benefits consumers through a wider range of choices. It's a clear demonstration of how healthy competition can drive progress and lead to better products in the market for us consumers. Labor and Employment: The Oompa-Loompas, Wonka's dedicated workforce, provide a unique lens through which to view labor economics. Their unconventional employment arrangement, which involves compensation in cocoa beans and a perpetual supply of Wonka Bars, challenges conventional notions of labor relations. This shows the role of incentives and alternative compensation structures in the labor market, demonstrating how different approaches to employment can yield surprising outcomes. Consumer Behavior and Brand Loyalty: The children who visit the factory serve as vivid examples of consumer behavior. Their preferences, impulses, and decisions are a microcosm of how consumers interact with products in the real world. From Augustus Gloop's insatiable appetite to Violet Beauregarde's competitive spirit, each child's behavior reflects different aspects of consumer psychology. Additionally, the unwavering brand loyalty displayed by Charlie Bucket and his family highlights the enduring value of trust and connection between consumers and a brand. Wealth Inequality: At the heart of this tale is the Bucket family, with young Charlie at its center. Their humble abode stands in stark contrast to the lavish estates of the more affluent families in the story. The Buckets exemplify a life of simplicity and struggle, where every penny is counted and each meal a precious commodity. This economic divide serves as a poignant reminder of the unequal distribution of wealth and opportunities. While the Buckets exemplify diligence and fortitude, working tirelessly to make ends meet, the more privileged families seem to effortlessly float through life on a cushion of affluence. It's a perfect portrayal of how, in any society, the allocation of resources and rewards can be far from equitable, underlining the stark realities of wealth inequality. Now as we step out of the realm and return to the realities of our ever-changing economy, it’s worth reflecting on the parallels we’ve uncovered. It may seem silly for me to compare the two, but within Wonka’s world lie insights that resonate within our own market. From scarcity and supply chain to innovation and labor, the undercurrents in this tale are as relevant as they are enchanting. The Bucket’s family resilience in the face of adversity serves as a reminder of humans’ ability to persevere, even in the most challenging economic environments. As we navigate our own adventures, let’s carry with us some wisdom and a touch of whimsy. Consider watching the movie with these perspectives in mind; after all, sometimes the sweetest lessons come from the unlikeliest of places. Pictures Charlie and the Chocolate Factory – Roald Dahl – Saved You a Spot Charlie and the Chocolate Factory movie review (2005) | Roger Ebert Charlie and the Chocolate Factory musical could be a golden ticket | Musicals | The Guardian Augustus Gloop Charlie and the Chocolate Factory (2005) Charlie and the Chocolate Factory (2005)

Amidst the whirlwind of melodies and the enchanting aura of Taylor Swift's Eras Tour, a remarkable symphony was orchestrating behind the scenes – one that resonated not just with the hearts of fans but also with the pulse of the economy. Her performances have left a trail of prosperity in its wake. Did you like my folklore-style writing there? In other words, Taylor Swift has boosted our economy to the point even the FED made comments on it. For those of you who haven’t yet heard of THE Era’s Tour, it’s Taylor Swift’s 6th concert tour, a captivating journey of all her “eras”, recapping the magic of all ten albums. The moment tickets became available, the demand to witness Taylor live reached a fever pitch, with tickets selling out in no time. Some were even comparing her to the Beatles themselves. Fans from all corners of the world travel to be a part of the mesmerizing experience Taylor Swift delivers on stage. Her ability to ENCHANT her audience knows no bounds. According to Forbes, Taylor’s influence goes beyond just the realm of music, as she has the power to create $4.6 billion in consumer spending alone. That is the equivalent of the aggregate GDP of 35 different countries, all coming from the talent of one music artist. Unbelievable really. She recently announced the extension to go international. Can’t wait to see what she brings to the new regions. Cities hosting her performances experience a surge in economic activity, with hotel bookings reaching heights not seen since the start of the COVID-19 pandemic, as observed in Philadelphia, according to the Philadelphia FED Office. Similar effects have been reported in Cincinnati, where local businesses witnessed a significant boost thanks to Taylor Swift's arrival. Even tourist information centers like Choose Chicago have had their records shattered with a surge in occupied hotel rooms when she visited in June. It's a pattern we can't ignore – akin to the Super Bowl, Taylor's concerts breathe life into the surrounding regions, benefiting the community as a whole. Every concert attendee spends around $1300 each for the full Eras experience, encompassing some of the most creative outfits I’ve seen, tickets, travel, accommodation, food, and merchandise. The cumulative spending is substantial, but it's a small price to pay when we witness the positive impact on the nation's economy. I'm delighted to see Mother Taylor's helping hand in fostering prosperity for all! Resources The Federal Reserve says Taylor Swift's Eras Tour boosted Taylor Swift boosting local economies Pictures Taylor Swift Fans Fall For ‘Cruel Summer' Trap Ahead of Eras Tour in Chicago. How Can You Avoid it? Taylor Swift's Eras merch truck an experience in itself as fans happily wait for hours Inside Taylor Swift's 'Eras' tour wardrobe – from designer sketches to outfit details

The word “debt” is thrown around everyday. At its core, it’s just a fancy word for owing someone something, typically money. Now, not all debt is bad. When you know you have the ability to eventually pay it back without breaking a sweat, all is good. When managed smartly, debt can help you along your life path, like taking a loan for college to increase your career potential. But, that does not mean you can spend your money like there is no tomorrow. And no, you do not have to pay off your debt as fast as you can; you still need money to make a living, and not all income can go towards what you owe. With a set plan, you can easily chip away at your debt. But remember, time is money, literally. Those interest payments can pile up quickly and you may end up paying more than what you owed. Minimum payments plus constant spending does not get rid of the problem. Have a balance of both time and money. There are two other terms that will often come up when talking about debt: budget deficit and budget surplus. When you have more income than spending, you have a budget surplus, and vice versa would be a budget deficit. The United States (US) has run a deficit for almost 20 years, and the debt has gone through the roof. THE FACTS: As I write this, the current US debt is $32.615 trillion, increasing every second. This website does a great job of visualizing all the major values that go into the US monetary system. It is crazy to see all the numbers rapidly changing. It just comes to show how much economic activity is going on at every single moment, especially considering that the GDP increases simultaneously. Believe it or not, it is the norm for the top 10 growing countries to be trillions of dollars in debt, (except India and South Korea). No country has as much debt as the US, but no country has a GDP as high as it either. When a nation is buried in debt, it will have less potential to invest in itself. There will be less opportunities and flexibility if all economic growth slows down. Expectations for inflation increase and people lose confidence in the economy. In times of crisis, the country will not be equipped to leisurely spend to solve the problem. This takes away freedom in many aspects Turns out the Federal Reserve System (FED) is the largest holder of US debt. During the peak of the pandemic, the FED bought many Treasury Bonds to keep the economy from shutting down. As of now they owe around $6.1 trillion, almost 20% of the total debt. So what’s all the talk about the debt ceiling? Before we get to the answer, here is another definition check: Debt ceiling is a cap on the total amount of money the US can borrow to enhance the nation and cover financial obligations. It was initially created so that the Congress would not have to approve every time a transaction added to the debt. In January of 2023, the US reached its debt limit at $31.4 trillion, and the ceiling was increased in June of 2023. If the debt limit had not been increased accordingly, the US would have to rely only on the cash at hand and default on the trillions they owe, leading the country, and by extension, the entire world to collapse. Easy Fix? The real question is: “Why can’t the US government just print money to pay off the debt?” Contrary to popular belief, the government is not responsible for printing money; the FED takes care of that by ordering the Treasury Department to print money. And of course, any shortcut solutions seem tempting, but printing money would just leave the economy worse off. Say we print and drop $32 trillion into the economy, we do not have $32 trillion worth of goods and services to use it on. With that much money chasing too few goods, all the prices are going to spike, pushing us into the spiral that is inflation. Even the relatively little money ($5 trillion) pumped into the economy during the pandemic left us at a 9.06% inflation rate last year. We faced it first-hand, paying higher prices for gas and eggs. Imagine that but six times worse. Forget the idea of inflation; we would encounter its dangerous cousin, hyperinflation, each digit multiplying by hundreds and thousands. Lastly, I love me a little story time, so here we go: While many people think the worst case of inflation occurred in Germany after World War I, it actually was in Hungary following World War II. Inflation between 1945 and 1946 and was brought upon the country due to the idea of ‘just printing more money,’ but resulted in an inflation rate of 41,900,000,000,000,000%. To put the situation into perspective, prices doubled every 15 hours. If you walked into a coffee shop, you would pay a higher price for a cup of coffee than the person walking out the door behind you. Hungary’s pengos became worthless, where savings and wages lost value within days. In fact, pengos became more useful to make fires and be used as wallpaper. To bring the madness to an end, their currency was replaced entirely by the forint. I think we would all prefer to pay off the debt the right way rather than printing too much and using dollar bills as toilet paper. Grasping the Scale… Check out this impressive visualization. It clearly pictures the money the US owed when we hit the debt ceiling. Hard to believe, but we would have to add up the GDPs of India, Japan, and China to amount to the US debt. And by the way, if we paid a dollar a second, it would still take more than 700,000 years to pay off the debt. Crazy. Should we be worried? One question that many ask economists is “should we be worried about the national debt?” Heck, quite a few high school students were wondering the same thing at a program I attended this past week: Economics for Leaders. Our professor had a simple answer: “Yes, the debt is increasing daily, but that is no concern when our GDP is following the same pattern.” Since our country shows no signs of decline, our federal government will surely stay alive. When we borrow more money, it opens up more economic activity, generating money to slowly fill the debt gap. But if we keep borrowing to pay off existing amounts, how are we going to get out of this pickle? At the end of the day, the national debt is caused by political decisions in the form of tax collection, government spending, and third party negotiations. One tip many economists have given is to focus only on long-lasting investments such as medical research and infrastructures. Investing millions on hipsters to stop smoking or on dead comedian hologram technology is not going to take the country far. Especially in a time of such large debt, these should not be prioritized. Debt, debt, debt… So what do we need to do? Do we keep calm because we are still growing as a country, or do we worry that our government is not making the smartest decisions? I say a mix of both. The debt has to be taken care of at some point and inflation is not the solution for it. Rather, implementing smart changes and advocating for the greater good can pull us up. Resources Top 10 Reasons Why The National Debt Matters Everything You Should Know About the Debt Ceiling What is the national debt? 18 Facts on the US National Debt That Are Almost Too Hard to Believe How worried should we be if the debt ceiling isn't lifted? Unsplash for pictures

DISCLAIMER: I aim to shed light on the disparities that exist against African Americans, not to generalize or diminish the experiences of anyone. This post focuses on the economic impact of racism on a national scale. It is no secret that racism has inflicted hardships on minorities throughout our nation for years now. One would think that all forms of segregation in the United States would crumble after the Civil War and Civil Rights Acts, but sadly, nationwide protests and persistent occurrences of hate crimes prove that wrong. Focusing on just African Americans, the US economy has lost more than $16 trillion due to the discrimination of this group of people since 2000. Citi, a financial service corporation, estimates that if we are to address and eliminate the deep-rooted racism against African Americanss, our economy could witness a boost of up to $5 trillion dollars in the upcoming years. These staggering numbers are derived from an analysis of disparities in African American housing, wages, education, and access to resources compared to white people; it’s not something we can simply brush aside. We as a nation bear the responsibility to look into the literal costs of discrimination. Now, let’s dissect this $16 trillion loss: A potential $13 trillion went down the drain when African Americans were denied an estimated 6.1 million jobs due to discrimination. Despite advancements with desegregation, the unemployment difference remains incredibly high. To this day, when faced with the hiring decision between Devonte Harris and Christopher Adams, Devonte stands less of a chance. In fact, a study done by UC Berkeley and UChicago economists showed that 10% fewer African American applicants were called in for an interview than the equally qualified white applicants. This not only perpetuates injustice, but also brings our economy’s numbers down. When looking at employed African Americans specifically, there was a $2.7 trillion loss in income because African Americans were paid wages less than white counterparts. To put that into perspective, for every dollar the average white man makes, the average Black man is paid 71 cents. Black women facing both racial and gender disparities are paid an even less proportion of 63 cents. Whether we like it or not, numbers add up over time, burdening our nation. For those of you unfamiliar with the concept of House Credit, it is a tax reduction applied to people who cannot afford the complete payment on their houses, commonly given to those of low income. Now, it is not quite fair when African Americans are kept from the benefit; the discrimination in that sector alone resulted in a $218 billion loss. The education gap takes another toll, amounting to a loss of $90 billion to $113 billion. Even today, African Americans still fight the battle of unequal educational resources. Because of this lack, they are prevented from securing spots at prestigious schools and well-paying jobs. And even when they do get admission into great places, many attribute their success to affirmative action policies; not only do they have a tough time reaching certain levels, but they are also subjected to backhanded remarks that undermine their hard work. All of these factors intertwine like dominoes. Not being able to secure a job or earning a lower wage leaves one with limited money, let alone the inability to receive House Credit. How are they meant to attain valuable education without financial resources? This naturally draws a cycle of being unable to find a well-paying job, or even a job for that matter, simply because their achievements and contributions are not valued, even though they are just as capable as any other race. The ultimate worry is that though people are aware of the issue, the growth to fixing it has been moving far slower than it should be. With our nation begotten from treating African Americans as less-than, that mindset has been carried among generations of Americans. It is important to move beyond just hiring more African Americans or providing more educational opportunities, as the economic ramifications of racism are undeniably catastrophic. The only way to mitigate these devastating economic losses is to increase the quality of community, where everyone has equal opportunity to thrive. I mean, what is the point of hiring Devonte when there is no effort to foster an environment in which he feels like he belongs? Resources Why Black workers still face a promotion and wage gap that’s costing the economy trillions Name Discrimination Study Finds Lakisha And Jamal Still Less Likely To Get Hired Than Emily And Greg U.S. Economy Lost $16 Trillion Because Of Discrimination, Bank Says Separate and Unequal: Black Americans’ Fight for Education

When I think of Switzerland, I think of rich chocolate and world-class watches, but these luxury exports are just the tip of the iceberg when it comes to their thriving economy. With a remarkable Gross Domestic Product growth from $9.5 billion to $800 billion in just 70 years, there must be a secret behind its success. Switzerland has been 1st globally in terms of its innovation and is one of the most competitive countries. What makes it even more impressive is that Switzerland has almost no natural resources, yet has achieved so much. If you have read my previous post on Sri Lanka, you may be able to recognize the differences between Sri Lanka and Switzerland that have contributed to their different current positions in the world as you read. There are six main reasons that are talked about in regard to how Switzerland got so far. Neutrality: Since Switzerland’s neutrality establishment in the Treaty of Paris in 1815, the country has not participated in any foreign wars. In fact, Switzerland has the oldest policy of neutrality worldwide; not only was it one of the few countries to not fight in World War II, but it also sold numerous weapons to allied powers amounting to a total of 900 million Swiss francs in wartime sales. In efforts to keep the country secure and peaceful, Switzerland ended up also protecting its economy from any major devastations as opposed to the surrounding European countries which lost many lives and big chunks of their economy. Instead of spending its resources on military and reconstruction efforts, Switzerland was free to further develop its economy. Collective Political System: Similar to the USA’s congress, Switzerland has a parliament that makes decisions for the country as opposed to a president with total power. With a group of people with equal power to advise both the president and vice president, Switzerland has exhibited little internal conflict, and this collaborative political system has done wonders for the country in terms of economic growth. High-Quality Production: Remember the rich chocolates and bougie watches I mentioned at the start? They aren’t just tasty and stylish, but they also play a big role in the status of the country. These quality products are so top-notch that people all over the world are willing to pay big bucks for them, meaning that Switzerland brings in high amounts of revenue from every corner. Do Nestle, Rolex, or Lindt ring a bell? Safe Banking: If anyone is looking for a safe place to stash their cash, Swiss banks are definitely the place to go. These banks have a reputation for being the most secure places to keep money. No matter the financial state of the account holder’s home country, their money won't be jeopardized. Swiss banks have a very high secrecy system, making it illegal to share any account holder’s information with anyone. So depositors can rest easy knowing their funds are in good hands and their financial privacy is protected. Swiss banks are known not only for this secrecy but also for their country’s stability. With more money in the banks, they can lend out more loans, which leads to more economic activity and a more prosperous country. Plus, these banks are pretty strict about where the money comes from, so it is pretty uncommon to hear about any illegal activities in asset deposits. Inheritance: Switzerland has this unique policy where every child gets an equal amount of their parent’s assets; not even a will can change that. This way, all members of the family are left with something to work with and it lowers the number of low-economic-status residents in the country. Rich people are able to maintain their wealth and poor people won’t be discriminated against from the right to an inheritance. Industrialization: With no natural resources in stock, Switzerland resorted to industrialization and has definitely made quite a mark in that sector. Its exports are both potent and diverse: gold, blood, watches, chemicals, and medications. It also focuses a lot on creating domestic goods rather than buying cheap products elsewhere, making it an expensive country but ultimately leading to economic success. As you can see, there are numerous policies that have gone into maintaining the richness of Switzerland, from peace treaties to government unity. So, the next time you take a bite out of some Swiss chocolate, remember that there is a lot more to this small country’s mighty success than meets the eye. Resources Why is Switzerland so rich? How Switzerland Get So Rich Switzerland GDP 1960-2023

Here is the link to a video my friends and I created on the Google Lawsuit by the US Department of Justice (DOJ): https://www.youtube.com/watch?v=Gdan1x5tpII In a world where Amazon can deliver your groceries, Apple can unlock your car, and Facebook can find your friends instantly, it's hard to deny the dominance of big tech. But what about Google, the search engine that knows what you're thinking before you even finish typing? As one of the world's largest and most successful tech companies, Google's reach extends far beyond search, from maps and email to cloud storage and AI. But with this power comes a responsibility to play fair and promote healthy competition in the market, and recently google has not been keeping up. Since 2017, Google has been attacked with quite a few antitrust actions both by Europe and the US. Europe alone charged Google $2.7 billion for misusing its search tactics in 2017, $4.4 billion for not responsibly handling its market dominance in 2018, and $1.7 billion for abusing advertising practices in 2019. In October 2020, the DOJ filed an antitrust lawsuit against Google, accusing the company of participating in anti-competitive practices that have harmed both its consumers and rivals. It mainly centers around Google's dominance in the search engine market, which they have maintained through illegal means. For example, Google has crafted agreements with search engine developers and device producers to have Google show up as the default search engine, which is the sole reason it has maintained its spot as the dominant search engine. In January of 2023, another lawsuit was filed by the DOJ against Google with the support of 8 states, this time focused on Google’s online advertising business. The complaint alleges that Google’s dominance in the advertising market limits competition and innovation, leading to lower quality and higher cost transactions for market participants. In other words, Google's monopoly power in the advertising market has created an environment where website creators earn less money, and advertisers pay more than they would in a more competitive market. Whereas with a more competitive economy, we could stimulate lower prices and better quality. Google continued to acquire and get rid of any potential threats, so it is not put at risk of no longer being dominant. An example of this would be when the company found out that publishers were adding code so that other ad exchanges could compete for ad space on their website before Google had the chance to bid. Google saw this as a great threat and immediately created its tool called “Open Bidding.” Publishers and ad exchanges who take part in this were required to give Google complete transparency in their bids. Horizontal vs Vertical Integration A phenomenon I learned in my AP US History class that I want to touch on is the difference between horizontal and vertical integration, both of which Google implements. Horizontal integration is when a company takes over another company in the same industry. Both companies would be selling similar products and have similar customers. The goal is to increase market share, reduce competition, and gain economies of scale by consolidating similar businesses. A famous example would be Facebook’s (now Meta’s) acquisition of Instagram. They both were social media platforms, meaning they offered the same product and have the same customer base as mentioned before. Facebook was able to access a new audience and eliminate the competition. Vertical integration is on more of a micro level. It is when a company becomes more self-reliant by merging with a company that works for its products supply chain or creating its supplies for its product. An example would be Netflix. Although it originally started as a DVD rental business, Netflix slowly grew to be a streaming service. They ended up releasing many Netflix Original movies/shows to build the company. Some of them are great hits: Mowgli, To All The Boys I’ve Loved Before, Enola Holmes, Outer Banks, and more. Since Google exhibits both horizontal and vertical integration, the company became untouchable. My friend Naisha Patel goes into more depth about the concept specific to Google in the linked video. Who cares? Now let’s get down to why any of this matters. Why did US and Europe go through all that hassle to punish Google? What do they gain out of it? Market competition is essential to a prospering economy. The fundamentals of economics show that when numerous firms are competing for business, there tend to be lower prices, better quality in goods/services, and more variety. Lower prices: It is the easiest way for a company to bring in more customers. If two companies are selling the same product but at different prices, I would go for the one with the lower price. Although they are selling at a lower price and bringing in less money per unit compared to the other company, in the long run, they have outrun the higher-priced company as they have a larger customer base. Better quality: Another way to bring in customers would be to create better-quality products. Most people would invest a little more money in something that does a better job than in something that does a lousy job. Better quality can mean many things: lasts longer, is tastier, works better, has friendlier service, etc. More variety: To stand out in the market, each company will work to make its product unique. This not only allows more choices for consumers but also a wide range of innovations as they need to get creative. All of these are to attract more customers, which ends up boosting the economy as well as there is more economic activity. People can buy product that suits them in terms of quality and price. And that's exactly what we want as consumers, right? The same concept also applies to labor markets. To bring in more employees, income and working conditions need to be high. Slowly over time, it has become easier for companies to climb up the ladder, acquire smaller competitors, and ultimately settle into a monopoly, such as Google. We now know why competition is good, but why are monopolies bad? When a company becomes a monopoly, it gains significant market power, which allows it to control prices and quality without fear of competition. This leads to higher prices and lower quality for consumers since the monopolistic firm knows that consumers have no other options. Monopolies do not have the incentive to appeal to the customer base as they do not face competition. This can result in stagnant markets and limited technological advancements, ultimately harming the overall economy. Solutions These are just a few of the many solutions that can be explored and implemented to address Google’s anticompetitive practices: Increase Transparency: By making information about their algorithms and policies more available, users and competitors can better understand what's behind the scenes. It would allow rivals to rise as they have something to go off and companies can build and feed off of others’ genius. Splitting Up: In Google’s case, this could mean separating its search engine business from its advertising and data collection businesses. Specialized companies would be more competitive and agile, and would foster innovation and creativity. Smaller companies would also be less likely to take part in anticompetitive practices, as they would have fewer resources to dominate the market. However, splitting up comes with its challenges. It can be a lengthy and costly process, and there's no guarantee that the new companies would succeed or avoid old habits. Government Oversight: With stricter antitrust laws and hefty fines for anticompetitive behavior, Google would have to think twice before engaging in any shady business practices. And if that's not enough, the government could even get involved in the company's operations. It would be a cautionary step to prevent the situation from getting this far. Search Neutrality Policy: This solution advocates for the implementation of a search neutrality policy, which would require search engines to present all search results in an unbiased manner. Imagine going to a bookstore and asking the worker for a book recommendation, but instead of getting a fair answer, the worker only recommends books from a specific publisher that pays them off. That wouldn't be fair, right? Similarly, search neutrality ensures that search engines like Google don't show a preference for their products and services over those of their competitors, giving everyone a fair chance to compete in the search engine market. While there are many potential solutions to address the problem, it’s clear that action should be taken immediately to ensure the health of our economy and democracy. The all-knowing search engine may be dominating the tech world now, but its recent antitrust issues clearly show it's not playing by the rules of the game. As the saying goes: "With great power comes great responsibility," and it seems Google needs a reminder. Resources: Justice Department Sues Google for Monopolizing Digital Advertising Technologies DOJ files second antitrust suit against Google seeks to .to break up its ad business Google accused of monopolizing $250B U.S. digital ad market Justice Department sues Google for "corrupting" ad market Most Americans see a lack of competition among tech companies as a serious problem Lack of Competition Strangling the U.S. Economy? Big Tech’s problem is its lack of competition The Importance of Competition for the American Economy Why competition matters Horizontal Integration vs. Vertical Integration: What's the Difference?

In the land of plantations and beaches, Sri Lanka was once fueled with positivity. Its rich history and culture brought in over two million visitors a year from all around the world before the pandemic hit. But little do you know, beneath the surface of its beauty and heritage lies a rough economic reality. Recently, the country has faced numerous setbacks, including political instability, corruption, and poor fiscal management. Let’s explore the factors that lead to this economic collapse and the efforts made to address the issue. It is going to be a long read, so get ready! This island nation is what we call a resource-poor nation, meaning it is classified as a low-income country by the World Bank. Its economic spur only started in 2009, soon after the end of its Civil War. Though the country grew in some aspects, it struggled to maintain financial stability. The country experienced a collapse due to a combination of factors: High Debt Levels: Let's face it; managing money isn't easy for a common man, let alone a whole country. On one hand, Sri Lanka’s government spent a lot of money on various expenditures, which can be a good thing, but on the other hand, the country did not make enough money to keep up with its spending. It's like buying a Lamborghini when you're only earning minimum wage. Not a good idea, right? So, to finance its expenses, the government borrowed money from local banks to international lenders. The result? The country racked up debts quickly, and as of 2019, Sri Lanka's debt was 93.6% of its GDP and 112% in 2021. Yikes! Political Instability: Over the past decade, this island nation has seen numerous changes in government. Between 2010 and 2020 alone, Sri Lanka went through four presidents and five prime ministers – no wonder policymaking has been so inconsistent. But the real kicker is that this political instability comes with a side of corruption and abuse of power. Sri Lanka has ranked pretty low regarding clean governance. Former President Mahinda Rajapaksa was accused of misusing government funds and not being transparent with the nation he represents. COVID-19: The pandemic has definitely left its mark on Sri Lanka's economy; I mean where has it not been? The country's already struggling economy took a massive hit. It had a sharp downturn in tourism and disruptions to global supply chains. Sri Lanka's GDP growth rate went from -0.2% in 2019 to -3.5% in 2020 because of the pandemic. This downturn was worsened by the government's inability to manage the crisis. There were reports of corruption as aid and relief packages were not being distributed. On top of that, the country faced a shortage of essential supplies and had to turn to imports, which added to its mounting debt. Currency Depreciation: The Sri Lankan rupee has been steadily depreciating against the US dollar and other major currencies for several years. This is due to a mix of reasons we mentioned previously: high levels of debt, a trade deficit, political instability, and COVID-19. Things add up pretty quickly, don’t they? Structural Challenges: The country's economy is known to be highly reliant on agriculture and low-value-added exports, which has made Sri Lanka vulnerable to external shocks and global economic fluctuations. It struggled to diversify and develop new industries that could provide sustainable growth for its citizens. The country's education system has been criticized for not preparing its graduates for the demands of a modern workforce. The youth’s struggle to find meaningful work opportunities led to high rates of unemployment. Low Productivity: The agriculture, manufacturing, and service sectors have been struggling with low productivity. In fact, the average productivity of a Sri Lankan worker is only about one-fourth that of a worker in a developed country. Because of this, it has been hard for the country to compete in global markets and attract foreign investors. After all, who wants to invest in a country where productivity is lagging behind the rest of the world? Imagine showing up to a drag race with a bicycle – not a great look. There also seems to be a lack of innovation and technology, further hindering growth. The World Economic Forum's Global Competitiveness Report 2019 even ranked Sri Lanka 84th out of 141 countries in productivity, demonstrating an urgent need for reforms. Inefficient State-Owned Enterprises (SOE): The country's SOEs have operated with losses for years, and the financial burden has become unbearable. We're talking about over 500 enterprises here, mostly in the energy, transport, and telecommunication sectors. That's a lot of red ink! Inefficiencies, lack of modernization, and poor management have all contributed to their woes. The government has continued to support these SOEs, but this has only led to increasing levels of debt and deficits. In 2020 alone, half of SOE’s debts amounted to approximately 6.6% of its GDP, straining the government's financial resources. Clearly, something had to be done to increase profits and efficiency. It’s no secret that Sri Lanka has had its fair share of struggles in its business environment. A perfect storm of bad luck and poor decision-making brought the country down a spiral and ultimately to an economic collapse that started in 2019. But fear not; Sri Lanka has proven to be resilient and with the right policies and international support, I do not see a reason why it can’t bounce back stronger than before. Sri Lanka’s parliament appointed Ranil Wickremasinghe as Sri Lanka’s 8th president in July of 2022. Though there was some controversy, he seemed like the country’s best bet to carry it through the worst-ever setback since its independence. This domain was nothing new to him, as he was a prime minister numerous times. His first full-year plan included restructuring debt, increasing revenue, and cutting costs. "This budget will present a political and economic way forward for the country," he said in his statement. Soon after, in September of 2022, Wickremasinghe led the country into the four-year Extended Fund Facility program with the International Monetary Fund to help stabilize the economy and restore consumer/investor confidence. As part of the program, the government implemented economic changes such as fiscal consolidation, tax reforms, and structural changes to SOEs. The World Bank also stepped in to help the government put measures in place to prevent past mistakes from being made again. Its efforts have focused on transforming economic governance, increasing public sector transparency, and strengthening fiscal oversight and debt management. The organization’s support has also included efforts to transition Sri Lanka towards being a more open-minded economy. This course of action has created a more favorable business environment while also tackling the sources of financial vulnerabilities. As Sri Lanka bounces back from its economic downturn, it's crucial not only to uplift people from poverty and vulnerability but also to boost their ability to withstand shocks in this ever-changing unpredictable world. In fact, not only can Sri Lanka learn from its mistakes, but countries all around the world can protect its economy from possible downturns. The World Bank believes that every crisis presents an opportunity for change: “For Sri Lanka, this pivotal moment is a chance to reset its development model towards green, resilient, and inclusive growth.” I couldn't agree more. Resources: Sri Lanka’s Crisis How Did Sri Lanka’s Economy Collapse in 2022? Sri Lanka GDP Annual Growth Rate World Bank- Labor force, total The Global Competitiveness Report 2019 IMF Sri Lanka: 2021 Article Sri Lanka’s hard road to recovery from economic and political crisis Sri Lanka’s crisis offers an opportunity to reset its development model IMF Staff Reaches Staff-Level Agreement on an Extended Fund Facility Arrangement with Sri Lanka Tourism in Sri Lanka Op-Ed: The G20 could help fix Sri Lanka’s debt crisis. Will it step up?

Ever heard of the phrase “Money can’t buy happiness”? Well, it turns out that is not necessarily true. Before you continue to read on, take a look at the data analysis piece I put together on the relationship between financial status and emotional state. I walked through the steps I took to create all the tables and displays. One of the earliest studies to explore the relationship between income and happiness was conducted by economist Richard Easterlin, a former UPenn student and current professor at USC, in the 1970s. In his study, Easterlin found that, on average, people with higher incomes reported higher levels of happiness than those with lower incomes. However, he also noticed that once basic needs were met, the relationship between income and happiness weakened considerably. At a given point in time, people with higher incomes tend to be happier because they compare their income to those who are less fortunate, while those with lower incomes tend to feel less happy. Over time, as incomes rise across the population, the incomes of one's comparison group also rise, which weakens the positive effect of one's own income growth on their happiness. Despite making more money, they aren’t much happier. This phenomenon is now known as the "Easterlin paradox". His study helped to launch a field of research that has since explored the complex relationship. This idea has been further researched recently. The 2010 study titled "High income improves evaluation of life but not emotional well-being," was a landmark study that challenged many commonly held beliefs about the relationship between income and happiness. The study was conducted by a team of researchers led by psychologist Daniel Kahneman and economist Angus Deaton, both of whom later won the Nobel Memorial Prize in Economic Sciences for their work on well-being economics. The study analyzed data from over 450,000 Americans, who had been asked to rate their life satisfaction and their daily emotional experiences, such as joy, sadness, stress, and anger. The researchers found that, overall, people with higher incomes reported higher levels of life satisfaction than those with lower incomes. However, when it came to their daily emotional experiences, people's income level had much less of an impact. The researchers found that income was only weakly correlated with day-to-day emotional experiences and that the emotional benefits of income leveled off at around $75,000 per year. In other words, people who earned more than $75,000 per year didn't necessarily experience more positive emotions on a daily basis than those who earned less than that amount. The study was also criticized by some who argued that it relied too heavily on self-reported data and that other factors, such as health and social support, might be more important predictors of well-being than income alone. Other studies have looked at how happiness is impacted by how income is earned. For example, a 2013 study published in the Journal of Economic Behavior & Organization found that people who earned their income through activities that they found meaningful reported higher levels of happiness than those who earned their income through less enjoyable activities. 11,000 were surveyed in the United States and asked to rate their satisfaction levels. The findings suggest that it's not just the amount of income that influences happiness, but also how income is earned. People who are able to find jobs that align with their values and passions tend to experience more fulfillment, even if their income levels are not as high as those who earn more through less enjoyable work. So what's the bottom line? Can money buy happiness? Well, the answer isn't a simple yes or no. While having a certain level of financial stability can contribute to overall life satisfaction, it's important to know that there are other factors that influence our emotional well-being. As the research shows, the relationship between income and happiness is complex, and there are diminishing returns to the emotional benefits of income beyond a certain threshold. Ultimately, it's up to each individual to decide what truly makes them happy, whether it's financial success, pursuing their passions, or strong social relationships. So next time you hear the phrase "Money can't buy happiness," remember that the truth is a bit more nuanced than that. References: Money Can Buy Happiness The Esterlin Paradox High income improves evaluation of life but not emotional well-being Making a difference matters: Impact unlocks the emotional benefits of prosocial spending New Study Shows That More Money Buys More Happiness, Even For The Rich

Apart from being a noteworthy event, the 57th Super Bowl was a powerful economic force. Attracting viewers from every corner of the globe, there were 113 million viewers in the US alone, and it was streamed in 180 countries. Companies strive to create memorable advertisements, and the city that hosts the Super Bowl reaps substantial amounts in profits. And let’s not forget the impact on Rihanna herself, this year’s halftime performer. When it comes to hosting the Super Bowl, the benefits are more than just financial gains. It can draw many eyes to the city, attracting visitors and driving tourism long after the game. Local businesses like hotels, restaurants, and attractions all share the influx of visitor spending. In anticipation of the big day, certain companies even offer additional employment opportunities. Once the Super Bowl is over, these jobs are no longer needed, but now people have money in their pockets. However, this responsibility does come with its costs. The host spends approximately 100 million dollars. You may be thinking, why would a city want to host when expenditures are so high? According to the National Football League (NFL), the game brings in a lot of revenue - we're talking $300-500 million, which exceeds the cost by a great margin. There is also a prestige factor involved: it is a grand honor and can be a source of pride for both the city and its residents. And with the potential for a great economic return in the long run, it's no surprise that cities are eager for the chance to hold this iconic event. It was not just the 2023 host city, Glendale, Arizona, that profit, but the two cities of the teams playing also benefited. Hotels and bars throughout Philadelphia and Kansas City were filled as fans who were unable to make it to the game crowded with fellow fans to watch the game. During the Super Bowl, the ads are a big deal, both from an economic and business standpoint. The costs of airing a single ad are notoriously high. As of this year, it took around $7 million to broadcast a 30-second-long advertisement during the live show. That’s $233,333 per second! And that amount is just for the airtime. The cost will easily pile up to produce the ad itself. Despite the high costs, companies are still willing to invest money into the process as they would be able to reach a massive audience base. From an economic perspective, Super Bowl ads can tremendously promote the company's name. A well-executed ad has the potential to drive up sales, brand awareness, and product buzz. This would then translate into higher revenue and growth for the company in question. The Super Bowl is often seen as an"advertising Olympics," where companies compete to create the most talked-about ad of the night. Personally, the Doritos ad caught my eye. It was the perfect example of a celebrity feature, Jack Harlow, and humor, both strategies to draw in viewers. The ads themselves are big business. Companies create intricate campaigns that go beyond just a 30-second video. They try to incorporate social media, influencer marketing, and other tactics to get people to remember their brand in the little time they have on the screen. Some companies have even seen their Super Bowl ads go viral, generating plenty of social media support and revenue from more customers and partnerships. Matthew McGranaghan, a professor of marketing at the University of Delaware, says that typically, viewers would try to skip ads or direct their attention towards other things, except during the Super Bowl. Some people even watch the game just to see the ads. People feel delighted viewing something for the first time and companies take advantage of the anticipation of the enormous audience. Believe it or not, Super Bowl halftime performers do not get paid. The halftime show is more of an opportunity for artists to put themselves out there rather than the artist serving the NFL. In other words, the NFL helps promote the performer, not the other way around. However, the NFL covers most of the performance costs. And besides, Rihanna will end up making the money in other ways. Her 13-minute performance gave her the chance to showcase her work on a huge platform. Additionally, artists’ streams usually boost after the show is over. Rihanna had a 211% increase in on-demand streams and a 390% increase in digital song sales. This year's sponsor was Apple Music, and with their talent and technology, Rihanna’s first live show in the last seven years was a one-of-a-kind experience. With the help of Apple Music and the NFL, Rihanna was able to “cram in 17 years of work into 13 minutes” according to the star of the show herself. The Super Bowl plays into business in a variety of ways. While hosting the event requires a significant investment, the potential long-term economic benefits and prestige make it an envied opportunity across the United States. The game surely excites the most die-hard football fans, but that is only one part of a long, economic story. References: Super Bowl 30-second ad costs 2023 The Super Bowl's Economic Impact on its Host City The economics of the Super Bowl Is Hosting the Super Bowl Worth It for Cities? The Business Side of the Super Bowl The unsustainable economics of Super Bowl ads Inside Apple and Rihanna's Super Bowl halftime strategy Why Halftime Performers Don't Get Paid Why Rihanna did not get paid Rihanna Saw A 390% Boost In Song Sales Doritos reveals Super Bowl commercial

At this point, I think all of us have heard of the recession coming our way, whether it be from Warren Buffet telling us to think opportunistically during this fall or Larry Summers asserting that a recession is almost inevitable at this point. However, how is this possible when all prices seem to be on the rise everywhere we look, from eggs to gas prices? How is it possible when employment and consumer spending are still going strong? Before we dive deeper into the discussion, let’s take a moment to understand the concepts behind recession and inflation. A recession is a drop in economic activity, as measured by the Gross Domestic Product (GDP), for two consecutive quarters. The signs of an upcoming recession include a rise in unemployment and a slowdown in consumer spending. This creates a vicious short-term cycle, as high unemployment leads to decreased consumer spending, lowering sales, and causing a drop in consumer confidence, resulting in people only buying necessities. However, in the long run, a recession can lead to increased spending as the economy recovers and people regain their confidence and financial stability. There is a recovery process to bring the economy to this point. Fiscal and monetary policies come into play to dilute the damage done and bring the economy back to stability. The government can increase spending to release more money into the market and cut taxes so that households have more disposable income to spend on goods and services. The Federal Reserve Bank also plays a crucial role in the control of a recession through Open Market Operations (OMO). In the event of a recession, the bank would cut interest rates to once again put more money in the people’s hands and execute Quantitative Easing (QE), where the central bank makes purchases to stimulate the economy's activity. Now, inflation does just as much damage to the economy as a recession but on the other side of the spectrum. Inflation is the result of the rapid growth of prices, higher demand, and oversupply, causing prices to increase, and is measured through the Wholesale Price Index (WPI) and Consumer Price Index (CPI). There are three main types of inflation to be aware of: Demand-pull inflation, Cost-push inflation, and Built-in inflation. Demand-pull inflation is when the demand for goods and services exceeds the available supply, leading to an increase in prices. If a good/service is in short supply, people generally still pay regardless of the price. Basically, too much money is going after too few goods. Cost-push inflation, on the other hand, occurs when the cost of production increases, leading to a rise in prices. For example, when there was a shortage of eggs this past year due to a deadly disease among the birds, the cost of an egg went up almost four times the original price. This would result in restaurants upping their prices for any egg-containing dishes. Built-in inflation results from long-term expectations of price increases. This can occur when businesses and consumers expect prices to rise in the future, and they adjust their behavior accordingly, such as increasing wages, prices, and production costs. An instance of this would be when you anticipate inflation, and you ask your boss for a paycheck boost as you know prices are likely to increase, and you don't have enough in your wallet to cover the expenses. To mitigate inflation, there are monetary and fiscal policies that limit spending activity and keep the economy smooth. They do the opposite of what we talked about earlier with the recession. Fiscal policies increase taxes and spend less on government purchases, and monetary policies include the central bank increasing interest rates and making fewer purchases. In the short run, inflation can lead to increased spending, particularly on essential items, as people try to purchase these goods before their prices rise further. However, high inflation can also lead to reduced spending on non-essential items as people's purchasing power decreases. In the long run, continued high inflation can lead to decreased spending as people become accustomed to higher prices and adjust their expectations accordingly. This can lead to a lower overall demand for goods and services, and may even result in a recession if inflation becomes too high and the economy cannot adjust. Now it's time to dig in and figure out what is really going on with the economy. The COVID-19 pandemic has inflicted a severe and long-lasting impact on the U.S. economy, causing disruptions that are likely to persist well into the future. It triggered a sharp contraction of economic activity as government restrictions, such as lockdowns, and the fear of disease spreading kept many people at home. Unemployment rates also increased as the news of the virus became more widespread. Inflation typically follows a period of economic downturns, and this instance is no different. The first step that brought us here was the government, as well as other countries, giving money to households to help the situation at home and loosen up tight money habits. Once the number of cases waned, restrictions were removed, and people became susceptible to being found outside, driving up demand by a hefty amount. This is what we call pent-up demand. During the peak of the pandemic, people stopped their urges to buy unnecessary items, but once the economy was making its way up, people started purchasing high-cost items. An immediate result of this was demand outpacing supply. Producers were not prepared for the high amount of demand for their products. Companies had a hard time finding employees and returning to the routine they had going before the disruptions. The production costs increased, and so did the prices on the shelves. On top of all this, the Russian attack on Ukraine in early 2022 impeded the COVID-19 recovery, further pushing us into uncertainty. Many of the world's trading connections temporarily stopped with both Ukraine and Russia. Unfortunately, American businesses depended on many of the products exported from Ukraine and Russia, meaning the toll on them affected the US as well. Though this did not have a significant impact on the US economy like COVID-19, it still played a minor role in the instability of our country. Inflation and recession are like two sides of a coin that can affect the economy in a cyclical way. In other words, as the economy moves from a period of inflation to a period of recession, it is as if the coin is flipped, and the opposite economic phenomenon takes over. Recession can lead to inflation by creating a shortage of goods and an increase in demand, while inflation can lead to a recession when there is a reduction in consumer spending as a result of increased prices. The current state of inflation and the potential for a future recession are interconnected. The Fed's fight to reduce inflation may push us into a recession. This is why we are hearing various predictions about the economy. It’s a tricky balance, but policymakers use various tools to keep it smooth and avoid this cycle of volitality. References: Difference Between Recession and Inflation Are We In A Recession Yet? How Has the Pandemic Impacted Inflation