Call the central bank fire brigade
Article Abstract:
There is little agreement about how to handle the emerging world economic crisis. Furthermore, most proposals seek to prevent a crisis in the future, rather than solve the existing one. Current developments in the world financial system must be tackled immediately if the world economy is not to be pushed into recession in 1999. World finance ministers must now consider reducing interest rates by a full percentage point. If they fail to do so, then they will have to reduce interest rates by three percentage points when a recession emerges in 1999.
Publication Name: The Independent
Subject: Retail industry
ISSN: 0951-9467
Year: 1998
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Are we repeating errors of 1987-88?
Article Abstract:
Central banks were able to avoid the risk of deflation by easing monetary policy, but this approach could also have served to spark off an inflationary bubble similar to that seen in 1988 and 1989. However, this does not mean that central banks were misguided to ease monetary policy, as was the case in 1987. They have shown that they are willing to provide liquidity to the financial system as needed. Furthermore, the risk/return trade-off for central banks is now very different from 1987.
Publication Name: The Independent
Subject: Retail industry
ISSN: 0951-9467
Year: 1998
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