UPSC CURRENT AFFAIRS SIMPLIFIED

21 May 2024 07:03

Q1. Consider the following statements:

Statement-I:

The International Criminal Court (ICC) is a permanent court that prosecutes serious international crimes committed by individuals.

Statement-II:

ICC has jurisdiction over the signatory countries to persecute individuals for extraterritorial crimes such as genocide, war crimes, humanitarian crimes, and territorial aggression.

Which one of the following is correct in respect of the above statements?

(a)  Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

(b)  Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

(c)  Statement-I is correct but Statement-II is incorrect

(d)  Statement-I is incorrect but Statement-II is correct

UPSC CURRENT AFFAIRS SIMPLIFIED

21 May 2024 07:01

INTERNATIONAL CRIMINAL COURT (ICC)

Syllabus: INTERNATIONAL ORGANISATIONS

Context: The International Criminal Court (ICC) recently sought a Gaza ‘war crimes’ arrest warrant against Israel Prime Minister Benjamin Netanyahu.

Learning Points:

* The International Criminal Court (ICC) was established by the Rome Statute on July 1, 2002.

* The International Criminal Court (ICC) is a permanent court that prosecutes serious international crimes committed by individuals.

* It has jurisdiction over the signatory countries to persecute individuals for extraterritorial crimes such as genocide, war crimes, humanitarian crimes, and territorial aggression.

* The ICC is the first intergovernmental organisation that works as a court for criminal cases.

* It has jurisdiction over the most serious crimes of concern to the international community: genocide, war crimes, crimes against humanity, and the crime of aggression.

* Its headquarters are in The Hague, Netherlands.

* While 123 nations recognize the ICC’s authority, notable exceptions include the US, China, Russia, and India.

* The court is funded by contributions from states parties and voluntary donations from various entities. Unlike the International Court of Justice (ICJ), which handles disputes between states, the ICC focuses on prosecuting individuals.

* It can exercise jurisdiction if the national court is unable or unwilling to do so, and only for offenses committed after the Statute’s entry into force in 2002.

* It is intended to complement, not replace, national judicial systems.

* The ICC has six official languages (English, French, Arabic, Chinese, Russian, and Spanish) and two working languages (English and French).

UPSC CURRENT AFFAIRS SIMPLIFIED

18 May 2024 09:26

Q1. With reference to the Asset Reconstruction Companies (ARCs) in India, consider the following statements:

1. Asset Reconstruction Companies (ARCs) are specialized financial institutions that purchase the bad debts of a bank at a mutually agreed value.

2. The required funds to purchase such debts can be raised from Qualified Buyers.

3. They function under the supervision and control of the SEBI.

How many of the above given statements are correct?

UPSC CURRENT AFFAIRS SIMPLIFIED

18 May 2024 09:25

FREE MOVEMENT REGIME (FMR)

Syllabus: POLITY ANG GOVERNANCE

Context: Mizo tribals threaten to take up arms if the Centre goes ahead with its plan to scrap Free Movement Regime (FMR).

Learning Points:

* The Free Movement Regime (FMR) is an agreement between India and Myanmar.

* It was established in 2018 as part of India’s Act East policy.

*  Under the FMR, individuals residing near the India-Myanmar border can move up to 16 km without a visa.

*  They need a one-year border pass for stays lasting up to two weeks in the neighbouring country.

* The FMR aimed to facilitate local border trade, improve access to education, and strengthen diplomatic ties.

*   However, India has recently decided to review the FMR due to security concerns related to illegal immigration, drug trafficking, and insurgency activities.

*  India's decision to fence the entire 1,643-kilometre stretch of border with Myanmar, could result in the end of FMR permanently.

*  India- Myanmar border runs from the tripoint with China in the north to the tripoint with Bangladesh in the south.

UPSC CURRENT AFFAIRS SIMPLIFIED

17 May 2024 13:00

Q1. Consider the following:

1.  Investigate cases of money laundering

2.  Summon any person for evidence or record production

3.  Confiscate property
involved in money laundering

How many of the above are the powers of the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA)?

UPSC CURRENT AFFAIRS SIMPLIFIED

17 May 2024 12:58

ENFORCEMENT DIRECTORATE (ED)

Syllabus: POLITY AND GOVERNANCE

Context: The Supreme Court of India has recently made a significant ruling regarding the powers of the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA).  The court held that the ED cannot arrest an accused under Section 19 of the PMLA after a special court has taken cognisance of the complaint of money laundering.

Learning Points:

* The Enforcement Directorate (ED) is India’s financial watchdog, serving as both a law enforcement agency and an economic intelligence unit.

* The ED traces its origins back to May 1, 1956.

* The ED operates under the Department of Revenue within the Ministry of Finance.

* Its headquarters are in New Delhi, led by the Director of Enforcement. Regional offices exist in Mumbai, Chennai, Chandigarh, Kolkata, and Delhi.

* Recruitment includes officers from various backgrounds, such as IRS (Indian Revenue Services), IPS (Indian Police Services), and IAS (Indian Administrative Services).

* The ED investigates and tackles economic crimes such as money laundering, foreign exchange violations, and corruption.

* It enforces economic laws and regulations, ensuring compliance and addressing violations related to financial transactions.

* Recent amendments allow extending the tenure of ED directors from two years to up to five years.

Objectives and Key Acts:

* The ED enforces three critical acts:

  Foreign Exchange Management Act, 1999 (FEMA)

  Prevention of Money
Laundering Act, 2002 (PMLA)

  Fugitive Economic Offenders Act, 2018 (FEOA)

* The PMLA aims to combat money laundering by:

  Preventing and controlling money laundering.

  Confiscating and seizing proceeds obtained from laundered money.

  Addressing other issues related to money laundering in India.

Powers and Responsibilities:

* Under the PMLA, the ED has the authority to:

  Investigate cases of money laundering.

  Summon any person for evidence or record production.

  Confiscate property
involved in money laundering.

UPSC CURRENT AFFAIRS SIMPLIFIED

16 May 2024 09:20

Q2. With reference to the Insurance Surety Bonds (ISBs), consider the following statements:

1.  Insurance Surety Bonds are financial instruments where insurance companies act as a ‘Surety’ to provide a guarantee that the contractor will fulfil its obligations as per the agreed terms.

2.  These bonds serve as a third-party guarantee issued by insurance companies on behalf of the applicant to beneficiaries and authorities.

3.  ISBs often have lower costs compared to traditional bank guarantees.

How many of the statements given above are not correct?

UPSC CURRENT AFFAIRS SIMPLIFIED

21 February 2023 05:58

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UPSC CURRENT AFFAIRS SIMPLIFIED

10 February 2023 14:22

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UPSC CURRENT AFFAIRS SIMPLIFIED

07 February 2023 19:08

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UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:51

KEY TERMS TO KNOW FROM COP26

* NET-ZERO

Net-zero emissions pertain to achieving an overall balance between greenhouse gas (GHG) emissions produced, and GHG emissions removed from the atmosphere.

A country can be said to be net-zero when it produces no emissions, either because it has actually phased out all emissions or because it is removing enough from the atmosphere to offset the emissions it releases.

The latter can be achieved by restoring or increasing forest cover or through technologies such as carbon capture.

* CARBON NEUTRALITY

Carbon neutrality is a state of net-zero carbon dioxide (CO2) emissions. It is achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specified period.

There are several actions that an emitter can take to achieve this balance, such as reducing energy consumption and emissions-producing activities, improving energy efficiency processes, and consumption of renewable sources of energy.

A nation or an organization can also achieve carbon neutrality through carbon offsetting, a process of compensating for CO2 emissions it generates by participating in, or funding efforts to remove CO2 from the atmosphere.

Offsetting usually involves paying another party, somewhere else, to save emissions equivalent to those produced by the emitter.

* CARBON FOOTPRINT

A carbon footprint measures the amount of CO2 equivalent a country, an industry, an individual, or a product emits or is responsible for.

The footprint is calculated in both direct emissions (from the burning of fossil fuels, heating, and transportation), and indirect emissions during the whole lifecycle of products.

It also includes emissions of other greenhouse gases, such as methane, nitrous oxide, or chlorofluorocarbons (CFCs).

It is expressed as a measure of weight, as in tons of CO2 or CO2 equivalent per year.

* CARBON CREDITS

Carbon credits are a system of purchasing and trading carbon emissions to mitigate the growth in concentrations of global atmospheric CO2 levels.

The term carbon credit usually refers to a tradable certificate or permit that shows a company, industry, or country, has paid to remove a certain amount of CO2 from the atmosphere.

This certificate gives them the right to emit 1 tonne of CO2 or the equivalent of different greenhouse gas. It is used by individuals or businesses to reduce their carbon footprint through investing in an activity that reduced, removed, or sequestered greenhouse gases at another site.

The trading of carbon credits has turned them into a type of climate currency, subject to supply and demand, just like fiat currencies.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:40

* Private Finance: Private financial institutions and central banks announced moves to realign trillions of dollars towards achieving global net-zero emissions. Among them is the Glasgow Financial Alliance for Net Zero, with over 450 firms across 45 countries that control $130 trillion in assets, requiring its member to set robust, science-based near-term targets.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:30

TG-Data replaces the Task
Group on Data and Scenario Support for Impact and Climate Analysis (TGICA) whose mandate was
to facilitates the distribution and application of climate change-related data and scenarios.

IPCC Assessment Reports cover the full scientific, technical and socio-economic assessment of climate
change, generally in four parts – one for each of the Working Groups plus a Synthesis Report. Special Reports are assessments of a specific issue.

Methodology Reports provide practical guidelines for the
preparation of greenhouse gas inventories under the UNFCCC.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:22

A cautionary tale: On warning of the IPCC report - The Hindu
https://www.thehindu.com/opinion/editorial/a-cautionary-tale/article65144683.ece

UPSC CURRENT AFFAIRS SIMPLIFIED

01 March 2022 11:14

STAGFLATION

Stagflation refers to the situation of coexistence  of stagnation and inflation in the economy.

Stagnation means low National Income growth and high unemployment.

The Philips curve shows that at high rate of inflation, there is low rate of unemployment. But stagflation proves the contrary.

Before 1970s, it was considered that at the time of inflation, the economy will be booming. 1970s scenario proved contrary with the existence of inflation and stagnation.

DEFLATION

Deflation is opposite to that of inflation. The persistent  and  appreciable fall in the general level of prices is called as deflation.

DISINFLATION

The rate of inflation at a slower rate is called disinflation.

For example, if the inflation of last month was 6% and rate of inflation in the current month is 5% it is termed as disinflation.

REFLATION

Reflation means deliberate action of government to increase rate of inflation to stimulate economy.

It is usually done to redeem the economy from deflationary situation.

UPSC CURRENT AFFAIRS SIMPLIFIED

21 May 2024 07:01

PRACTICE QUESTIONS

UPSC CURRENT AFFAIRS SIMPLIFIED

21 May 2024 06:57

IRAN

Syllabus: GEOGRAPHY – WORLD MAP

Context: Iranian President Ebrahim Raisi tragically lost his life in a helicopter crash on May 20, 2024. The incident occurred in the northwestern part of Iran, where the helicopter made a “hard landing” due to heavy fog.

Learning Points:

* Iran is located in West Asia, with the Caspian Sea to its north and the Persian Gulf and Gulf of Oman to its south.

* It shares land borders with seven countries:
  Northwest: Azerbaijan and Armenia
  North: Turkmenistan
  East: Afghanistan and Pakistan
  West: Iraq
  Turkey lies to the northwest, sharing a border with Iran as well.

* This strategic location is significant for India’s foreign policy, particularly for connectivity to Afghanistan and Central Asian countries, offering an alternative route to Pakistan.

UPSC CURRENT AFFAIRS SIMPLIFIED

18 May 2024 09:25

PRACTICE QUESTIONS

UPSC CURRENT AFFAIRS SIMPLIFIED

18 May 2024 09:23

ASSET RECONSTRUCTION COMPANIES (ARCS)

Syllabus: ECONOMY

Context: The Reserve Bank of India (RBI) has identified “several” supervisory concerns related to the functioning of asset reconstruction companies (ARCs).

Learning Points:

* Asset Reconstruction Companies (ARCs) are specialized financial institutions that purchase the bad debts of a bank at a mutually agreed value and then attempt to recover those debts or associated securities themselves.

* ARCs are registered under the Reserve Bank of India (RBI) and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).

* They function under the supervision and control of the RBI.

* As per the RBI, ARC performs the functions namely Acquisition of financial assets, Change or takeover of Management or Sale or Lease of Business of the Borrower, Rescheduling of Debts, Enforcement of Security Interest and Settlement of dues payable by the borrower.

* ARCs take over a portion of the bank's debts, which qualify as Non-Performing Assets (NPAs). Therefore, ARCs are involved in the business of asset reconstruction, securitisation, or both.

* All the rights previously held by the lender (the bank) in regard to the debt are transferred to the ARC.

Funding

* The required funds to purchase such debts can be raised from Qualified Buyers.

*  Qualified Buyers include Financial Institutions, Insurance companies, Banks, State Financial Corporations, State Industrial Development Corporations, trustee or ARCs registered under SARFAESI and Asset Management Companies registered under SEBI that invest on behalf of mutual funds, pension funds, FIIs, etc.

* The Qualified Buyers are the only persons from whom the ARC can raise funds.

UPSC CURRENT AFFAIRS SIMPLIFIED

17 May 2024 12:59

PRACTICE QUESTIONS

UPSC CURRENT AFFAIRS SIMPLIFIED

17 May 2024 12:55

ARMENIA AND AZERBAIJAN

Syllabus: INTERNATIONAL EVENTS

Context: Armenia and Azerbaijan reached an agreement regarding disputed sections of their shared border. This marks a significant step toward normalizing relations between the two historic rivals. The deal involves the return of four border villages that were previously seized by Armenia during the 1990s. These villages—Baghanis Ayrum, Ashaghi Askipara, Kheyrimli, and Ghizilhajili—will now be under Azerbaijani control.

Learning Points:
 
* Armenia and Azerbaijan are located in the South Caucasus region, which is at the crossroads of Eastern Europe and Western Asia.

* Both countries have been involved in territorial disputes, particularly over the Nagorno-Karabakh region.
Key geographical details of both countries:

Armenia:

* Landlocked country with no access to the world’s oceans.

* Bordered by Georgia to the north, Azerbaijan to the east, Iran to the southeast, and Turkey to the west.

* The capital and largest city is Yerevan.

Azerbaijan:

* Located to the east of Armenia, with a significant coastline along the Caspian Sea.

* Bordered by Russia to the north, Georgia to the northwest, Armenia to the west, Iran to the south, and the Caspian Sea to the east.

* The capital and largest city is Baku.

UPSC CURRENT AFFAIRS SIMPLIFIED

16 May 2024 09:18

Q1. Consider the following states in India:

1.  Nagaland
2.  Assam
3.  Mizoram
4.  Tripura
5.  Sikkim
6.  Arunachal Pradesh

How many of the above- mentioned states share a border with Manipur?

UPSC CURRENT AFFAIRS SIMPLIFIED

17 February 2023 19:28

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UPSC CURRENT AFFAIRS SIMPLIFIED

07 February 2023 19:09

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UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:58

PARIS CLIMATE ACCORD

 It is a legally binding international treaty on climate change.

 It was adopted by 196 countries at Conference of the Parties COP 21 in Paris in December 2015.

Goal: To limit global warming to well below 2° Celsius, and preferably limit it to 1.5° Celsius, compared to pre-industrial levels.

Objective: To achieve the long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:45

INDIA AT COP26

* India is the 3rd largest emitter in terms of net emissions whereas it has the lowest per capita emission among the major economies of the world (17% of the world population emitting just 5% of total).

* India has announced its net-zero targets in COP26 accordance with the Paris agreement of 2015.

* Under the Paris agreement, countries were bound to submit carbon-cutting plans and updates by the end of 2020.

# INDIA’S 5 POINT PLEDGE OR PANCHAMRIT:

Net-zero by 2070

To increase its non-fossil fuel energy capacity to 500 GW by 2030.

Increase the share of renewables in the energy mix to 50% by 2030.

Reduce the emissions intensity of its economy by 45%.

Reduce emissions by 1 billion tonnes of CO2.

India also supported the Africa Group’s demand for $1 trillion in climate action that the developed countries should make available for climate action in developing nations.

# INDIA’S EFFORTS AT PRESENT:

India’s renewable energy capacity is 4th in the world as of now and growing at a rapid rate.

India has seen an increase of about 25% in renewable energy capacity in the last four years.

Indian railways, one of the largest emitters has promised to reach net-zero by 2030– this alone will reduce 60 million tonnes of emissions.

India has launched international institutions for climate action such as International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI),

India along with UK and Australia will launch the Infrastructure for Resilient Island States (IRIS) for the island nations and developing countries.

India will also be part of the launch of the Green Grids Initiative.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:40

COP26: UN CLIMATE CHANGE CONFERENCE 2021

COP26 was the 26th UN Climate change conference held in Glasgow, the United Kingdom in 2021.

The Conference of Parties (COP) is a well-known annual event that sees nations come together to discuss measures to reduce anthropomorphic global warming and steps to tackle Climate Change.

The COP26 summit brought parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change (UNFCCC).

# THE GLASGOW CLIMATE PACT:

The following were agreed upon in the Glasgow Climate Pact by the nations of the world:

* Recognizing The Emergency

Countries reaffirmed the Paris Agreement goal of limiting the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit it to 1.5 °C.

* Accelerating Action

Countries stressed the urgency of action when carbon dioxide emissions must be reduced by 45 percent to reach net-zero around mid-century. But with present climate plans and the Nationally determined Contributions are falling far short. Hence the Glasgow Climate Pact calls on all countries to present stronger national action plans next year, instead of in 2025, which was the original timeline.

* Moving Away From Fossil Fuels

The countries agreed to a provision calling for a phase-down of coal power and a phase-out of fossil fuel subsidies – two key issues that had never been explicitly mentioned in decisions of UN climate talks before.

* Delivering On Climate Finance

Developed countries came to Glasgow falling short on their promise to deliver US$100 billion a year for developing countries and expressed confidence that the target would be met in 2023.

* Stepping Up Support For Adaptation

The Glasgow Pact calls for a doubling of finance to support developing countries in adapting to the impacts of climate change and building resilience.

* Completing The Paris Rulebook

Countries reached an agreement on the remaining issues of the so-called Paris rulebook, the operational details for the practical implementation of the Paris Agreement.

* Focusing On Loss & Damage

Acknowledging that climate change is having increasing impacts on people especially in the developing world, countries agreed to strengthen a network— known as the Santiago Network, that provides vulnerable countries with technical assistance, knowledge, and resources to address climate risks.

They also launched a new “Glasgow dialogue” to discuss arrangements for the funding of activities to avert, minimize and address loss and damage associated with the adverse effects of climate change.

# NEW ANNOUNCEMENTS AT COP26:

There were many other significant deals and announcements which can have major positive impacts if they are implemented. These include:

* Forests: 137 countries took a landmark step forward by committing to halt and reverse forest loss and land degradation by 2030. The pledge is backed by $12bn in public and $7.2bn in private funding.

* Methane: 103 countries, including 15 major emitters, signed up to the Global Methane Pledge, which aims to limit methane emissions by 30 percent by 2030, compared to 2020 levels. Methane, one of the most potent greenhouse gases, is responsible for a third of current warming from human activities.

* Cars: Over 30 countries, six major vehicle manufacturers, and other actors, like cities, set out their determination for all new car and van sales to be zero-emission vehicles by 2040 globally and 2035 in leading markets, accelerating the decarbonization of road transport, which currently accounts for about 10 percent of global greenhouse gas emissions.

* Coal: Leaders from South Africa, the United Kingdom, the United States, France, Germany, and the European Union announced a ground-breaking partnership to support South Africa – the world’s most carbon-intensive electricity producer— with $8.5 billion over the next 3-5 years to make a just transition away from coal, to a low-carbon economy.

UPSC CURRENT AFFAIRS SIMPLIFIED

02 March 2022 09:29

Intergovernmental Panel on Climate Change (IPCC)

The Intergovernmental Panel on Climate Change (IPCC) is the international body for assessing the science related to climate change.

The IPCC was set up in 1988 by the World Meteorological
Organization (WMO) and United Nations Environment Programme (UNEP) to provide policymakers
with regular assessments of the scientific basis of climate change, its impacts and future risks, and
options for adaptation and mitigation.

IPCC assessments provide a scientific basis for governments at all levels to develop climate related policies, and they underlie negotiations at the UN Climate Conference – the United Nations Framework
Convention on Climate Change (UNFCCC).

The assessments are policy-relevant but not policy- prescriptive: they may present projections of future climate change based on different scenarios and
the risks that climate change poses and discuss the implications of response options, but they do not
tell policymakers what actions to take.

The IPCC embodies a unique opportunity to provide rigorous and balanced scientific information to
decision-makers because of its scientific and intergovernmental nature.

Participation in the IPCC is
open to all member countries of the WMO and United Nations. It currently has 195 members.

The Panel, made up of representatives of the member states, meets in Plenary Sessions to take major
decisions.

The IPCC Bureau, elected by member governments, provides guidance to the Panel on the
scientific and technical aspects of the Panel’s work and advises the Panel on related management
and strategic issues.
.
IPCC assessments are written by hundreds of leading scientists who volunteer their time and expertise
as Coordinating Lead Authors and Lead Authors of the reports. They enlist hundreds of other experts
as Contributing Authors to provide complementary expertise in specific areas. The authors may work
with Chapter Scientists who cross-check between findings presented in different parts of the report,
carry out additional fact-checking, and work on reference management among other things. Chapter
Scientists are usually early career scientists.


IPCC reports undergo multiple rounds of drafting and review to ensure they are comprehensive and
objective and produced in an open and transparent way. Thousands of other experts contribute to
the reports by acting as reviewers, ensuring the reports reflect the full range of views in the scientific
community. Teams of Review Editors provide a thorough monitoring mechanism for making sure that
review comments are addressed.

The IPCC works by assessing published literature . It does not conduct its own scientific research.

For all findings, author teams use defined
language to characterize their degree of certainty in assessment .

IPCC assessments point
to areas of well-established knowledge and of evolving understanding, as well as where multiple
perspectives exist in the literature.

The authors producing the reports are currently grouped in three working groups –
Working Group I:
the Physical Science Basis;

Working Group II: Impacts, Adaptation and Vulnerability; and

Working Group III: Mitigation of Climate Change – and the Task Force on National Greenhouse Gas Inventories
(TFI).

As part of the IPCC, a Task Group on Data Support for Climate Change Assessments (TG-Data)
provides guidance to the Data Distribution Centre (DDC) on curation, traceability, stability, availability
and transparency of data and scenarios related to the reports of the IPCC.

UPSC CURRENT AFFAIRS SIMPLIFIED

01 March 2022 11:21

Headline Inflation

As it includes all aspects within an economy that experience inflation, headline inflation is not adjusted to remove highly volatile figures, including those that can shift regardless of economic conditions.

Headline inflation is often closely related to shifts in the cost of living, which provides useful information to consumers within the marketplace.

The headline figure is not adjusted for seasonality or for the often-volatile elements of food and energy prices, which are removed in the core Consumer Price Index (CPI).

Headline inflation is usually quoted on an annualized basis, meaning that a monthly headline figure of 4% inflation equates to a monthly rate that, if repeated for 12 months, would create 4% inflation for the year. Comparisons of headline inflation are typically made on a year-over-year basis, also known as top-line inflation.


CORE INFLATION

Core inflation is a measure of inflation that excludes certain items that face volatile price movements.

Core inflation eliminates products that can have temporary price shocks because these shocks can diverge from the overall trend of inflation and give a false measure of inflation.

Skewflation

Economists usually distinguish between inflation and a relative price increase.

‘Inflation’ refers to a sustained, across-the-board price increase, whereas ‘a relative price increase’ is a reference to an episodic price rise pertaining to one or a small group of commodities. This leaves a third phenomenon, namely one in which there is a price rise of one or a small group of commodities over a sustained period of time, without a traditional designation.

‘Skewflation’ is a relatively new term to describe this third category of price rise.

Built-in Inflation

Expectations of future inflation cause built-in inflation.

That means, when prices rise, workers expect (and demand) higher wages to maintain their cost of living.

However, higher wages result in higher costs of production, which leads to higher prices, and the spiral begins. Because of this circular dependency, built-in inflation is sometimes also referred to as the wage-price spiral.

At this point, it is important to note that the expectations that cause built-in inflation always originate from either persistent demand-pull or significant cost-push inflation in the past. In other words, built-in inflation doesn’t occur on its own. It always needs a catalyst or a trigger to kick it off.

BASE EFFECT

Base effect refers to the phenomenon of current year index being influenced by very low or high previous year index.

UPSC CURRENT AFFAIRS SIMPLIFIED

01 March 2022 11:08

PHILIPS CURVE

Philips curve shows the relationship between rate of inflation and rate of unemployment. 

It shows that the relationship is negative. That is at high rate of inflation the unemployment rate is low.