José Ramón Díaz (Caixabank Research) | The recent deterioration of the growth/inflation mix is the result of the dynamics of an asymmetric recovery and will remain subject to a high level of uncertainty in the coming quarters. Nevertheless, we are still far from a scenario of stagflation like that of the 1970s, which is the major source of concern for a number of economists. This is because, firstly, the global economy is much more flexible than it was 50 years ago. Also, economic policy, especially in the monetary sphere, now has the tools (and the independence) to respond to such a risk.
BEIJING | Caixin Magazine | A ripple of skepticism recently hit prices of the yellow metal, but gold remains the ultimate hedge on inflation, as former Morgan Stanley’s Chief Economist for Asia Pacific Andy Xie explains. The global economy has already entered into stagflation with a growth rate of 2 percent and inflation at 3 percent. The inflation rate is likely to rise above 4 percent in 18 months while the growth rate will remain stuck in the same range. With inflation twice as high as the growth rate, the global economy will slip deeper into stagflation.