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Global Must Read Articles

January 26, 2012 | Latin America's Economies: Innocent Bystanders?

Latin America recovered strongly from the financial crisis of 2008-9, but now the region is feeling the pains of financial stress and dwindling global demand. Nevertheless, the major economies (the LAC-7: Argentina, Brazil, Colombia, Chile, Peru, Mexico, and Uruguay) in the region are still expected to perform decently despite a sluggish global economy.
In general, international investors are

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August 12, 2011 | US and Europe Must Support BRIC Recovery

The world economy now depends less on the leadership of the US and Europe, and more on the domestic consumption of large developing markets. ++ Western policymakers should be wary of new monetary stimulus, as a weaker dollar could raise inflation rates in the BRIC countries, slowing the growth of their domestic demand. ++ To support high consumption in emerging markets, Western leaders should

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May 25, 2009 | Inflation Not the Answer to US Financial Crisis

There are increasing calls from economists to use inflation to solve the financial crisis by keeping US interest rates artificially low. ++ They say it would reduce the real level of debt, and allow a faster recovery. ++ But inflation is “not some lightbulb that a central bank can switch on and off - it works through expectations.” ++ Using it in this way could lead to a double dip recession;

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December 8, 2008 | Fighting Deflation and Tempering Inflation

The European Central Bank is forecasting annual inflation rates for 2009 at 1.1 to 1.7% and for 2010 at 1.5 to 2.1%. ++ Yet, Interest rates are being cut below these markers. ++ Banking officials claim that “twenty per cent inflation is ultimately not as harmful as 5 per cent deflation.” ++ Buying longer-dated government bonds, adding short-dated securities to balance sheets, and even imposing

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November 10, 2008 | Beware Deflation

Deflation is the financial threat that might catch us unaware. ++ Relief from high food and oil prices is pleasant, but extreme price drops could signal economic havoc. ++ For now, falling prices will suppress inflation (5% in the US and 9% in Asia in 2008), and service industry prices are less volatile than raw goods, providing economic stability. ++ Ultimately, deflation threatens loan

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September 16, 2008 | The Euro, Still Going Strong

The Euro is not yet ten years old, but its success to date has been unquestionable. ++ Despite numerous exogenous shocks - ranging from the specter of terrorism to the subprime mortgage meltdown in the US - the Euro is still going strong. ++ Without a single currency, member states of the European Monetary Union would likely be experiencing the capital exploitation and speculation seen in the

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July 2, 2008 | Raising Interest Rates May Cause Global Recession

With European inflation at its highest ever since the introduction of the euro, many countries are tightening their credit reins in an effort to curb inflation. ++ The world’s central banks are slowly realizing the magnitude of the inflationary threat. ++ It is expected the European Central Bank will raise its interest rates tomorrow, US Federal Reserve also faces greater pressure to raise

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July 2, 2008 | Monetary Policy Must Tighten to Avoid Future Crises

According to a report by the Bank of International Settlements, the ongoing financial crisis has revealed the folly of lax monetary policy during periods of rapid credit growth and asset prices. ++ Central banks and financial institutions should approach the system holistically, not targeting certain individuals, but rather exercising “macroprudential” policies, which focus on

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April 23, 2008 | The Failure of Food-to-Fuel Mandates

The production of foodstuffs for biofuels was intended to reduce US energy dependency, mitigate climate change, and encourage crop-price stability. ++ Since they have proven highly inefficient, detrimental to the environment, and largely responsible for the global surge in food prices, the mandates need revisiting. ++ The US should now end the biofuel experiment and provide populations in need

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April 25, 2007 | The Economist on Holes in the US Housing Bubble

The newest tale of woe among American investment banks is the housing market, according to The Economist. Some analysts on Wall Street predict that the housing bubble is on the verge of collapse, and point to the “subprime mortgage market” as the culprit. These loans, given to potential homeowners with poor credit at little or no money down, provide initial low “teaser” interest rates, which

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