Inflation in most rich countries has been low since the 1990s, not least because of central banks’ success in lowering long-term inflation expectations. But today’s policymakers must weigh how far they can go in trying to engineer a post-pandemic recovery without unanchoring these firmly entrenched beliefs. Read Here | Project Syndicate
After committing to monetary-policy normalization in 2018, the US Federal Reserve and the European Central Bank spent the past year reversing course with further interest-rate cuts and liquidity injections. Yet, given mounting medium-term uncertainties, central bankers cannot assume calm conditions in 2020. Read Here – Project Syndicate
With India’s growth tumbling to 4.5% from 8.1% in little more than a year, you’d be surprised to know that Shaktikanta Das has one of the easiest jobs in central banking. He just has to keep doing what he’s been doing since becoming governor of the Reserve Bank of India last December: cut interest rates. Fortunately, political […]
China’s central bank must manage an economy structured in many ways quite differently from that of other major regions, such as Japan or the European Union. But the PBoC faces the same question of how effective monetary policy can be today. That has significant implications for the central bank’s signalling, which appeared to take a […]
In the early 1980s, the chairman of the US Federal Reserve, Paul Volcker, was able to choke off runaway inflation because he was afforded the autonomy necessary to implement steep interest-rate hikes. Today, the Fed is clearly under unprecedented political pressure, and it is starting to show. Read Here – Project Syndicate
After years of low inflation, investors and policymakers have settled into a cyclical mindset that assumes advanced economies are simply suffering from insufficient aggregate demand. But they are ignoring structural factors at their peril. Read Here – Project Syndicate
Many people seem to believe that authoritarian rulers deliver better economic results. And yet, with the possible exception of China’s Xi Jinping, Asia’s autocrats, from India to the Philippines, are presiding over increasingly fragile states and even more vulnerable economies. Read Here – Project Syndicate
Thanks to the dollar’s outsize global role, the first casualties of a somewhat irresponsible U.S. fiscal policy are likely to be emerging economies that have used the dollar to denominate their debts, not the United States itself. A stronger dollar and rising U.S. interest rates are increasing the burden of paying all dollar-denominated debts around the world. […]
The new central bank network created since 2008 is of a piece with the new networks for stress testing and regulating the world’s systemically important banks. The international economy they regulate is not one made up of a jigsaw puzzle of national economies, each with its gross national product and national trade flows. Instead they oversee, […]
The People’s Bank of China has surprised many with its tolerance for market pain as it squeezes leverage in parts of the financial system. But rest assured, China won’t clamp down so hard it endangers President Xi Jinping’s goal to keep growth above 6.5 percent, according to economists from Morgan Stanley, Mizuho Securities and Oxford Economics. […]
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