Does central banks’ “communication” matter? Some analysts believe it does. Therefore, Draghi may now have to work to repair his reputation as “Super Mario”.
Articles by Marcus Nunes
About the Author
Compared to the US, Switzerland has been a low inflation country, but the recent turn to deflation smacks a lot of too low NGDP growth.
In December 1985, Thomas Sargent spent some time in Brazil, giving speeches and talking to policymakers. Back home in January 1986, he published in the WSJ an Open Letter to the Brazilian Finance Minister: …When you have exhausted all of your opportunities to borrow, you will have to make one or more of unpleasant adjustments such as taxes rises, government expenditures cuts or default on some of you debt…
The international consultative Group of Thirty (G30), whose members are central bankers and bankers from big private banks, has just released a report. They conclude much work remains ahead for governments and central banks to secure a solid recovery.
What really shocked the markets was not the Fed’s decision to maintain zero interest rates for a few more months, but the statement that accompanied it.
It is a simple story of failure, but one that fits the facts. It´s also based on a simple premise: An inflation obsession that took hold in 1974.
German Finance Minister Wolfgang Schaeuble sought to turn the tables on critics of his fiscal-discipline push, saying he’s actually the better Keynesian.
Being one of the very few countries (two others are Poland and Israel) whose monetary policy managed to avoid a recession on the heels of the 2008-09 crisis, Australia is a natural object of Schadenfreude!