Inflation and Economics

PROPERTY INSURERS price policies today but face payouts a year from now. That makes their profits hostage to inflation. As swathes of America’s economy have begun rapidly reopening for business in recent weeks, thanks to falling rates of covid-19 infections and rising ones of vaccination, William Berkley has been paying close attention to prices of building materials and anything found inside homes, from lamps to laptops. The replacement value of a home in America may have leapt by 20%, year on year, Mr Berkley thinks. Since the eponymous founder of WR Berkley launched his firm over half a century ago, he has never witnessed a time like the past year—not even in the inflationary 1970s. 

Patrick Harker, president & CEO of the Federal Reserve Bank of Philadelphia, is helping to set U.S. monetary policy. Washington Post economics correspondent Heather Long will address with Harker the debate over increasing interest rates to keep the post-COVID-19 economy from overheating, and investing in education and skill programs to bolster the U.S. workforce. Join Washington Post Live on Friday, May 21 at 12:00pm ET.

The most celebrated theory in all of economics, the so-called First Welfare Theorem, says that, provided there is perfect competition and perfect information, free markets allocate resources resources efficiently. In other words, it says the father of economics Adam Smith was right, that the “invisible hand” of the market works in the best interest of society. Often the conditions are not met, and much of modern economics is about how to improve the otherwise suboptimal outcomes delivered by unfettered markets.

If supply chains can keep pace with demand, food manufacturers may be one of the few industries that could actually see some economic benefit from the COVID-19 pandemic.

A software program called “Annie” uses machine learning to place refugees in cities where they are most likely to be welcomed and find success.

The Institute for Operations Research and the Management Sciences will sponsor a summit Monday to encourage better use of data among government agencies. The summit, which will take place at the Reserve Officers Association building, will feature former Transportation Secretary Anthony Foxx and former CIA and NSA Director Michael Hayden.