The recent turmoil in the financial markets, particularly the Silicon Valley Bank (SVB) event, has thrown the spotlight on the intricacies of economic models that govern our understanding of inflation, interest rates, and the overall health of the economy. The IS-LM-PC model, an integration of the IS-LM analysis with the Phillips curve, serves as a critical tool in deciphering these complex dynamics.
As the clock ticks down to the 2024 presidential election, the Federal Reserve finds itself under the microscope. The burning question: Will the Fed act if the economic case is marginal? The institution's chairs have always maintained that their decisions are economy-driven, not election-cycle influenced. But can they stay true to their word amidst political pressures?