What Are the Challenges in Achieving a Soft Landing ?
Achieving a soft landing is a delicate balancing act and comes with several challenges:
1. Timing and Precision: Central banks must time their policy actions precisely. Acting too late or too aggressively can either fail to curb inflation or inadvertently trigger a recession.
2. External Shocks: Unpredictable events, such as geopolitical tensions, natural disasters, or pandemics, can disrupt economic stability and complicate policy efforts.
3. Global Interconnectedness: In a globally interconnected economy, actions taken by one country's central bank can have ripple effects worldwide, making coordinated policy actions essential yet complex.
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