Disinflation-felt locally, spread globally
UBS | Monetary policy remains stimulative globally, and labor markets are tightening. Yet, global inflation is low.
In the World
Australia Tries to Find ‘Balance’
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!
When Machines Think for Themselves: the AI Threat
A future in which machines are more intelligent than humans still seems the realm of science fiction. Just trying to use the voice search function on your smartphone might suggests this is the case, and that machines won’t be dominating the world for a long time to come.
Rationalizing China’s Exchange Rate Policy
By Yukon Huang via Caixin | Promoting the yuan as a reserve currency makes more sense regionally, but this would mean accepting more volatility relative to the U.S. dollar.
“If debt grows, it means that the world economy is still expanding”
How do we overcome a debt crisis with more debt? Bocconi University’s Marcello Minenna recalls that in a world with inflation it is always possible to control the behaviour of the debt/GDP ratio just by reaching negative real interest rates. Also, he points out that eight years after the financial meltdown the tight interconnections in real time between the global markets make the system intrinsically unstable.
Let’s talk about commodities’ crisis, not EMs’
The slowdown in oil prices affects all producer countries, both emerging and developed, whether Brazil, Mexico, Norway or the United States. The difference with the 90s is that EM are now much more solid.
Why is China finding it hard to fight the markets?
By Alicia García-Herrero at Bruegel | Sitting on a pile of debt, China’s only way out is to deleverage: more pain now for sustainable growth later. [Figure: China’s augmented fiscal deficit as % of GDP.]
SNB on the defensive at Jackson Hole
By James Alexander via Historinhas | Although it appeared that the VSPs gathered in Jackson Hole could only worry about non-existent inflation, I detected a defensiveness too.
Limited EM spillovers into DM (so far)
Could emerging markets spillovers push developed ones into recession?
Brazil will contract sharply in 2015 and stagnate in 2016
Brazil’s financial markets are being hit by political turmoil, economic deterioration and external factors.