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英国论文网:British and Dutch GDP:The spread of the cri(39)


2008 financial panic and the unnecessarily severe recession of 2009, they will likely
put their fingers on two.
• The failure to keep Lehman Bros functioning as a going concern.
• The failure of the ECB and the Bank of England to use their interest rate
setting firepower to organise a substantial globally co-ordinated interest
rate cut (the 8 October 2008 cut was too timid).
Economics ministries, not central banks, demonstrated
decisiveness
A convincing argument for independent central banks adopting an inflation targeting
framework is that, where central banks are forward looking and responsive,
they should be able to avoid deflationary slumps. The markets then should expect
the central banks to assess clearly the global economic situation and the downside
risks, and take decisive action. Instead, it was the European finance ministries, via
the bank refinancing packages announced between October 8th and 14th, that
demonstrated their far greater understanding of the risks involved. They acted in
a timely and potentially effective internationally co-ordinated manner. It was less
effective because the central banks failed to follow up their initial too small interest
rate cut. They were persuaded into a co-ordinated half point interest rate cut
on October 8th. The central banks then sat on their hands, despite a daily barrage
of deflationary news.
The folly of the central banks
of Europe
John N Muellbauer
Oxford University and CEPR
57
Emerging markets and the deflationary firestorm
By October 16th, the impact on emerging markets of the deflationary firestorm,
in consequence of the collapse in global growth and in commodity prices, had
become all too apparent. History shows that the resulting combination of financial
and currency crises leaves long-lasting damage in lost output, bankruptcies
and bad debts that handicap future recoveries. There is little chance of a significant
commodity price recovery from recent levels in the next six months. The reason
is that instead of stabilising the global economy, emerging market demand,
such as China’s, is falling, and thus amplifying the shock. As I pointed out at the
Bank of England’s Monetary Policy Roundtable (Sept 30th), a straightforward
piece of economics underlies this idea. While consumer spending is closely linked
with the level of income, investment is more driven by growth. It is the huge share
of investment in national output in emerging economies that makes them, and
their commodity demands, highly sensitive to the global slowdown.
The dual effect of the depreciation of emerging markets’ currencies and the
massive falls in commodity prices will induce the largest negative shock to the
price level in developed economies since WWII. Moreover, collapsing export


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