“Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses,” the British economist Lionel Robbins wrote in 1932.
Put simply: Every choice comes with tradeoffs that might not be so savory.
It’s the position the Federal Reserve finds itself in as the U.S. central bank’s monetary-policy committee prepares to convene next week. The dilemma here is whether to fight inflation, risking the possibility that doing so triggers a recession, or to tolerate higher prices and keep the momentum going. Making a choice is easier said than done, with the ongoing Russia-Ukraine war raising the specter of stagflation – a combination of low growth and high inflation.
Observers say Fed Chair Jerome Powell and his colleagues will kick-start the tightening process with an interest-rate hike of 25 basis points (0.25 percentage point) next…
