[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-326055-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-326055-en":131},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","breaking-the-inflation-recession-cycle","Breaking the Inflation-Recession Cycle","","Essay by W. Lee Hoskins arguing that inflation and recessions are not independent outcomes but part of a damaging cycle. Drawing on North American history, it links recessions to periods of cost and price pressures and to prior monetary policy errors that fueled high and variable inflation, interest rates, and later disinflation. It argues that stabilizing the price level is pro-growth, explains how uncertainty about future interest and inflation can distort business investment, and notes that non-monetary shocks can also trigger recessions.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/breaking-the-inflation-recession-cycle/326055/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/breaking-the-inflation-recession-cycle/326055.png","ImageObject",300,407,{"name":42,"@type":43},"Genevieve","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-31","2026-09-21",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",12,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"What is the main argument about inflation and recessions?","Question",{"text":63,"@type":64},"Inflation itself is presented as a cause of recessions, meaning there is no long-run trade-off between inflation and recession. Stabilizing the price level is described as pro-growth and as preventing persistent economic losses.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How can monetary policy actions lead to recessions?",{"text":68,"@type":64},"The text states that recessions can be caused by monetary policy mistakes, especially excessive monetary growth that fuels inflation and raises interest rates. Later disinflationary policies are then required, and blame patterns may ignore the original source of the inflation.",{"name":70,"@type":61,"acceptedAnswer":71},"What non-monetary shocks can also cause recessions?",{"text":72,"@type":64},"It lists technological innovations and economic disturbances such as droughts, strikes, wars, cartel actions, and political change. These can disrupt resource use or require institutional and market reorganization.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},326055,1790131463,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,111,115,120,123,127],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":93,"show_sort_weight":94,"slug":95},"Exam",70,"exam",{"id":97,"doc_module":4,"doc_module_name":25,"category_name":98,"show_sort_weight":99,"slug":100},5,"Comic",60,"comic",{"id":102,"doc_module":4,"doc_module_name":25,"category_name":103,"show_sort_weight":104,"slug":105},6,"Technology",50,"technology",{"id":107,"doc_module":4,"doc_module_name":25,"category_name":108,"show_sort_weight":109,"slug":110},7,"Healthcare",40,"healthcare",{"id":112,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":113,"slug":114},8,30,"research-report",{"id":116,"doc_module":4,"doc_module_name":25,"category_name":117,"show_sort_weight":118,"slug":119},9,"Religion & Spirituality",20,"religion-spirituality",{"id":118,"doc_module":4,"doc_module_name":25,"category_name":121,"show_sort_weight":118,"slug":122},"World Cup","world-cup",{"id":124,"doc_module":4,"doc_module_name":25,"category_name":125,"show_sort_weight":124,"slug":126},10,"Lifestyle","lifestyle",{"id":128,"doc_module":4,"doc_module_name":25,"category_name":129,"show_sort_weight":97,"slug":130},19,"General","general",{"code":4,"msg":82,"data":132},{"doc_id":79,"user_id":133,"nickname":42,"user_avatar":134,"doc_module":4,"category_id":112,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":97,"language":140,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":12,"update_tm":144,"read_time":145,"preview_page_count":4},1374391974585,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","by W.Lee Hoskins  \n0  \nver the years,many people havecome to believe that nations can pro-long an economic expansion,or avoidthe pain of a recession,with more infla-tion.Given this choice,some observersmay view inflation as a reasonable gam-ble and,perhaps,as the lesser of twoevils.These are false choices,however.  \nA look at recent history reminds usvividly of the economic pain resultingfrom inflation.Every recession in therecent history of North America hasbeen preceded by an outburst of costand price pressures.Let us not forgetthe miserable economic situation at thetum of this decade,when unemploy-ment andinflation were at double-digitlevels and production was declining.Ifwe learned anything from those dismaltimes,surely it was that the harmcaused by inflation takes years to undo,and usually comes at the cost of per-manent losses in income and economicwell-being.  \nToday,in both Canada and the UnitedStates,people seem to be more awarethan ever that the proper role of thecentral bank is to prevent these lossesby stabilizing the price level.Both Gov-emor Crow and Deputy GovemorFreedman of the Bank of Canada havepublicly committed to monetary poli-cies designed to stabilize the pricelevel.In the United States,FederalReserve Chairman Greenspan hasrepeatedly stated that the way to attainmaximum long-run growth and the  \n# Breaking theInflation-Recession Cycle\n\nhighest standard of living is to stabilizethe price level.  \nThe message is simple.In the long run,there is no trade-off between inflationand recession.Ultimately,inflation it-self causes recessions and results inless-than-optimum economic perfor-mance.A monetary policy that strivesfor price stability,or zero inflation,is apro-growth policy  \n## ■ Recessions:\n\nWhy Do We Have Them?  \nA recession is an economic downtumthat is widespread across enough in-dustries or regions to make the slow-down general for the economy.AI-though we do not understand recessionscompletely,we have seen that they canbe caused by monetary policy actions aswell as by nonmonetary factors.  \nIn the early 1980s,recessions werecaused by monetary policy mistakes,namely the excessive monetary growthrates of the 1970s.This excessivegrowth of money in both Canada andthe United States allowed inflation andinterest rates to rise,which led to theneed for disinflationary monetarypolicies in order to get our economiesback on acceptable real growth trends.Yet even today,we are apt to blame arecession on policies that reduced infla-tion instead of those that created the in-flation to begin with.  \nOctober 15,1989  \nIn a recent speech to a Toronto busi-ness group,Federal Reserve Bank ofCleveland President W.Lee Hoskinspresented his prescription for attain-ing maximum sustainable economicgrowth in the coming decade:apolicy of price stability that willthwart the damaging cycle of infla-tion and recession.  \nWhy is it that inflationary policiescause recessions?Business leaders facea great many sources of uncertainty sur-rounding any investment decision.First,they must know their market andoffer a product that people want.Nextthey must monitor costs while provid-ing the highest possible quality.Im-plicit in this task is a host of decisionsthat require guessing future rates of in-terest and inflation.Generally,high andvariable rates of inflation cause mis-takes in these decisions,mistakes thatmay lead to incorrect investment or in-ventory decisions.  \nFor some businesses,costs arisingfrom inflation and interest rates maynot seem critical;for example,thosewith low fixed costs and those that areable to adjust wages and prices for in-flation.For most,though,inflation andinterest rates will be critical.Otherwisecapable managers who made invest-ments in the late 1970s in inflation-sensitive areas—farming,timberland,oil,or real estate—fell into bankruptcy  \nwhen high inflation rates failed to con-tinue into the next decade.The peoplewho made this bet in the 1960s,how-ever,became very wealthy.The historyof the business cycle ","cbCaib74kxmaZ2HV","https://ap.wps.com/l/cbCaib74kxmaZ2HV","pdf",1196366,"English","# Breaking the Inflation-Recession Cycle\n## Recessions: Why Do We Have Them?","[{\"question\":\"What is the main argument about inflation and recessions?\",\"answer\":\"Inflation itself is presented as a cause of recessions, meaning there is no long-run trade-off between inflation and recession. Stabilizing the price level is described as pro-growth and as preventing persistent economic losses.\"},{\"question\":\"How can monetary policy actions lead to recessions?\",\"answer\":\"The text states that recessions can be caused by monetary policy mistakes, especially excessive monetary growth that fuels inflation and raises interest rates. Later disinflationary policies are then required, and blame patterns may ignore the original source of the inflation.\"},{\"question\":\"What non-monetary shocks can also cause recessions?\",\"answer\":\"It lists technological innovations and economic disturbances such as droughts, strikes, wars, cartel actions, and political change. These can disrupt resource use or require institutional and market reorganization.\"}]","Breaking the Inflation-Recession Cycle | PDF",1789972096,13]