[cm2187]

The economist is blaming it all on Ukraine but the reality is that rate increases will likely be the primary driver for the recession, at least in the US. And those rates hikes (and roll off of the Fed B/S) are a response to inflation. And as much as the economist or Biden would like to pin inflation on Putin, the reality is that the inflation started a year earlier than the Ukraine war, and is the result of money printing and mass covid subsidies. Ukraine is only making the matter worse.

It is important to recognise the causes because a lot of governments, in the US and Europe are running inflationary policies of mass subsidies in response to inflation, making the matter worse.

[brookst]

I knows that’s a theory, but I haven’t see any more evidence that inflation is due to monetary policy than I have that it is due to Ukraine. Lots of philosophical arguments that it must be, but no evidence. Correlation, causation, all of that.

Have you seen evidence of causality that goes beyond theory?

(I’m not necessarily disagreeing, just saying it often seems like a faith-based view)

[adra]

I'd agree that the Ukraine war is taking the heat for whats probably the result of economic policy. Late 2019 things wete already starting to look a little glum. 2020 everybody put a bunch of money into the system and 2021 was the world living fast and loose from that excess. 2022-2023 feels like a correction from 2020-2021 and one that's plainly predictable which is why this prediction has been well predicted in most markets and news outlets at this point. I have no idea why this seems like news at 11 for the HN crowd, but shrugs. Hope you're locked into diversified portfolios!

PS: though you can blame policy, I'd argue the hit now was a small price to pay for the potential for a much harder hitting system collapse if the COVID shock was ignored.

[cm2187]

The fact that the inflation predates the war in ukraine by several months should be evidence that Ukraine isn't the primary reason. That at least shouldn't be in dispute.

I am not sure what sort of evidence you would expect. Every time you print money you create inflation. Even the post 2008 QE created massive asset inflation that wasn't captured in the main CPI, but the logic still stands.

[jjeaff]

While money supply is one of the factors, most economists don't seem to think it is the largest factor nor the most important. The world supply chain is still catching up from covid shutdowns. The auto industry is a perfect example of this. There are still waitlists for many new vehicles. Which has also caused increases in the used market. Now that supply chains are finally starting to catch up, we are already seeing prices fall in the used market, despite overall inflation.

[w1nst0nsm1th]

It's like the apple which falls from the tree, gravity and all that...

Seriously, the effect of money supply on prices has been established for quite some time, with historical data to back it up.

[brookst]

Do you think that the global economy has the same dynamics today that national economies did 200 years ago?

[w1nst0nsm1th]

https://news.ycombinator.com/item?id=34207654#34211356