monetary policy

The Managing Director of the IMF and the chief economist are making no bones about it. More action by the ECB is inevitable. It is "just a question of timing," says Lagarde and "sooner was better than later", chimed Blanchard, the chief…

There is a battle within the European Central Bank. Some want to take stronger action. Others do not think it is necessary. It is not just a matter of counting up who is on what side of the issue. It is not simply about majority rules.…

Through the lens of someone looking at economies with rapidly ageing populations we can simply say that this problem arises because there isn't any consumption to pull forward! Fisher's interest theory was always valid, it is merely that in…

This isn’t a theme post. It is more like the posts I now do on Friday with a bunch of different ideas on important topics. But the underlying theme that interconnects the ideas is a deflationary-style slowdown. First, in Europe, the CPI is…

The West has accepted Crimea’s annexation and will likely only increase sanctions if Russia goes further The Ukraine – IMF deal will put the Ukrainian economy through the wringer Russia’s economy is going to tank due to capital flight…

In the wake of the financial crisis, some US policy makers understood that the economics profession had erred in not taking debt aggregates and financial stability into account when conducting macroprudential regulation and making economic…

By Marc Chandler There seems to be a stepped effort by ECB officials to talk the euro down. The process began with Draghi last week indicated that the euro has become a more salient factor as it poses a deflationary risk and threatens the…

It is now patently clear that US equity and corporate bond markets are overvalued. Much of the overvaluation has to do with low discount rates and the risk-on signal easy Fed policy has sent investors for over five years. Yet again, signs…

Market based information is telling us that spreads and leverage are now disconnected, fundamentals remain in-line with theory. Companies with higher net debt also have poorer liquidity positions.

By Frances Coppola Scott Sumner argues that when the monetary base is fixed, low interest rates are deflationary. I've emphasised the fixed monetary base because it is an important condition. If the monetary base is NOT fixed then the…