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World economy 3rd November 2014

ECB monetary policy places the EZ in an “increasing depression”

SAO PAOLO | By Marcus Nunes via Historinhas | Before it was Peter Coy with John Maynard Keynes Is the Economist the World Needs Now. Now it´s Anatole Kaletsky with The takeaway from six years of economic troubles? Keynes was right: The main lesson is that government decisions on taxes and public spending have turned out to be more important as drivers of economic activity than the monetary experiments with zero interest rates and quantitative easing that have dominated media and market attention.

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World economy 30th October 2014

China’s growing private sector

By Richard N. Cooper via Caixin | There is a widespread impression both inside China and out that after the vigorous economic reforms of the 1980s and 1990s, moving away from central planning and state control to greater emphasis on markets, the reform process stopped, or even reversed, during the 2002-2012 period. This view was perhaps reinforced by the emphasis in the third plenum of the Communist Party’s 18th Central Committee in November 2013 on the need to move further toward less guidance from the state and greater reliance on market prices to allocate resources.

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World economy 30th October 2014

The Fed becomes slightly more hawkish

MADRID | The Corner | As expected, the Fed confirmed the end of its QE3, although the announcement was slightly more restrictive. According to experts at Link Securitites, “while the decision shows that US economic conditions have improved (especially the labour market) and inflation remains at low levels, the message tone was more hawkish.” 

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World economy 29th October 2014

Fed shutters bond-buying program

MADRID | The Corner | Showing its confidence in the US economic recovery and the jobs market, the Fed announced it will put an end to its bond purchases scheme before the end of this week, the central bank announced after its FOMC two-days meeting on Thursday. Short-term interest rates will remain near zero for a “considerable time”.

deflacion recurso copia TC

World economy 23rd October 2014

Are we talking about deflation?

MADRID | The Corner | Which is the real origin of the deflationist pressure that the global economy is facing? A greater desire of saving money than investing at a global scale, experts at Morgan Stanley point out. The eurozone, Japan and the most stable emerging countries have a greater control over their domestic interest rates, whereas China, whose currency is pegged to the USD, will also import deflation -something Beijing won’t like. 

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World economy 23rd October 2014

Australia: A “Swedish Governor” at the RBA?

SAO PAULO | By Marcus Nunes via Historinhas | It would be pretty depressing, so late in the game, to see “gold medalist” Australia fall into a Swedish-type trap. I hope Mr Lowe is a lone voice: Australian central bank Deputy Governor Philip Lowe urged vigilance on asset prices inflated by record-low interest rates and said government action is needed to encourage companies to invest.