Friedman and Keynes.

"During the Great Depression, as people spent less, businesses saw a drop in revenue, leading to people being fired and prices being cut. An increase in unemployment led to a further cut in spending," wrote Vivek Kaul. Milton Friedman pointed out that "Between 1929 and 1933, more than 7,500 banks went bust," and so, "if the (US) Fed had printed and pumped money into the banking system, enough confidence would have been created among the depositors and the depression could have been avoided." "Between 1985 and 2009, the retail inflation in the US averaged 3.1% (simple average) per year." Central bankers believed they had beaten inflation but still feared deflation. That is why central banks in the West cut interest rates to near 0% and print money at any sign of financial trouble. "The great focus on deflation is the major reason why we live in a boom-and-bust world." However, the inflation rate in the US jumped from 2.6% in February 2021 to 4.2% in March. It climbed steadily thereafter to reach a high of 9.1% in June 2022. US Inflation Calculator. The US Federal Reserve hesitated to act at first, perhaps fearful of acting too soon and precipitating deflation, and kept saying that inflation was transient as it was due to restricted supplies because of the Ukraine war and will subside automatically once supplies were restored. However, when it realised that inflation was also because of increased demand as people were flush with cash it started raising rates, tentatively with 25 basis points in March 2022, followed by a rise of 50 basis points in May, and then went ballistic with 75 basis points rises in June, July, September and November 2022. Forbes. The enormous demand in the US economy was created when "Stimulus bills approved by Congress beginning in 2020 unleashed the largest flood of federal money into the United States economy in recorded history. Roughly $5 trillion went into households, mom-and-pop stores, restaurants, airlines, hospitals, local governments, schools and other institutions around the country grappling with the blow inflicted by Covid-19." NYT. This was in line with John Maynard Keynes who said that governments should increase spending and deficit when growth is weak. The consumer price index (CPI) inflation "Over the last 12 months, the all items index increased 3.2 percent before seasonal adjustment." BLS. Accordingly, the Fed increased its Funds rate by 25 basis points on 26 July, after holding off in June to see the effect of the previous 10 rate rises. As for India, "The country's real GDP growth in the first quarter will be better than the Reserve Bank's (RBI) estimate 8 percent, economists said." ET. The RBI estimates GDP growth of 6.5% for the full financial year. "The real issue is inflation in cereals and pulses at 13% and 13.3%, respectively," wrote Prof Himanshu. Prices of edible oils may also rise as, "Edible oil prices are largely determined by international prices, as India imports more than 60% of its needs." The US is hoping for a soft landing for its economy. India doesn't need one.