Inflation takes the boom out of the economy
Article Abstract:
An analysis of economic trends in the UK reveals that current government anti-inflationary policy should focus on the maintenance of the exchange rate of sterling. However, depreciation continues. Chancellor of the Exchequer Nigel Lawson is allowing the trade deficit to be financed by an influx of short-term foreign capital, invested in the UK in order to capitalize on rising interest rates. A stable pound will require ever-rising interest rates as investment portfolios increasingly shift away from long-term investment. The economic policy options currently open to Lawson are: maintaining a stable pound resulting in an economic slump, or stabilizing interest rates resulting in double digit inflation. There will most likely be a compromise allowing a rise in interest rates to stabilize sterling, followed by an adjustment in sterling in 1990.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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Will the giant grow
Article Abstract:
The Tokyo Stock Exchange (TSE) represents 40% of the capitalization of the world equity markets, but foreign penetration of the Japanese stock market is low because: Western countries believe share prices are over-valued; foreigners have a hard time entering and competing in the market; and Japanese companies pay small dividends. However, the prospects for continued growth in Japan and the TSE are positive. The market showed remarkable resiliency in handling both the October 1987 stock market crash and a mini-crash in October 1989. Positive indicators of continued Japanese economic health include a decline in the proportion of total exports to the US and an increase to Europe; half of all investment is being directed to new product and market development; and pension funds are growing.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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