International Economics: IB Economics

The rising cost of living in Sri Lanka is laid bare in this BBC article, which highlights how people have shifted away from cooking on gas stoves to cooking on firewood, have altered their diets and have reduced the number of daily meals they have, all of which have adverse developmental effects.

From a macroeconomic perspective, the government have stepped in to control the price of essential imports and preserve scarce foreign exchange reserves. The country is also facing higher debt financing requirements but it isn't the only South Asian nation in this position. 

Again, another article that reveals the importance of macroeconomic stability for development. 

Larry Elliott reflects upon the threat of inflation, arguing that hawks forecasting uncontrollable, double-digit inflation seem not to have moved with the times. 

He argues that inflation targeting and different inflationary expectations make overheating, and the associated inflation, unlikely and that instead we should be focusing on the fact that inflation needn't be a bad thing.

Indeed, it might be worth revisiting the costs of inflation and highlighting those circumstances in which controlled inflation is a good thing. Remember, the inflation target in most countries isn't 0% for many reasons - and at the moment, with a surge in government borrowing, higher inflation reduces the real value of government debt, so that might be considered a benefit too.