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interest rates

This tag is associated with 13 posts

Weldon and Moore (Artemis) on US economy, FED and the upcoming presidential elections

Fund managers Cormac Weldon and Stephen Moore run the Artemis US Select Fund and Artemis US Extended Alpha Fund respectively. The Artemis US Select Fund is a concentrated, ‘best ideas’ fund that follows a high-conviction approach. In this column they share their views on the US economy, the FED policy rate decisions and the upcoming presidential … Continue reading

ABC Newsletter: GREETINGS FROM NORTH KOREA

‘THE WORLD OF ABC ECONOMICS’. The abceconomics.com newsletter. Click here to download this month’s issue: abceconomics-news-nr5-0416 In this month’s issue: COVER STORY / GREETINGS FROM NORTH KOREA: THE ECONOMICS OF DPRK 2 ABC ECONOMICS INSIGHT / OUR READERSHIP AND REACH IN Q1.16 5 UK ECONOMY / HOW COULD A SHOCK TO GROWTH IN CHINA AFFECT THE … Continue reading

Is this why the FED is increasing interest rates?

Stefano F. Fugazzi (ABC Economics) reports – A recent research by two Federal Reserve Bank of St. Louis economists put into perspective last December’s decision by the Federal Open Market Committee (FOMC) to increase rates for the first time in nearly a decade. The researchers noted that “starting in the middle of 2014, the U.S. … Continue reading

Benefits and perils of internal (wage) devaluation

A joint research by Jörg Decressin and Prakash Loungani of the International Monetary Fund (IMF) examines the effectiveness of internal devaluation within the eurozone. Their findings suggest that in times of crisis it is more challenging to fully reap the benefits of internal devaluation as all members of a monetary union would try to pursue … Continue reading

How US stock markets reacted to the Fed interest rate hike

A reasearch by Stefano Francesco Fugazzi (ABC Economics) – Last March ABC Economics assessed the US stock market’s reaction to interest rate hikes (LINK). For months general consensus was that Fed Governor Yellen was going to increase rates by the end of 2015. On 16 December the Governor announced the first hike since 2006. As anticipated by … Continue reading

Causes and consequences of persistently low interest rates

Interest rates are at historic lows in advanced nations around the world and markets expect them to stay low for years. This column introduces the 17th CEPR-ICMB Geneva Report on the World Economy, “Low for Long? Causes and Consequences of Persistently Low Interest Rates”. Written by four world-renowned macroeconomists, the report suggests that real interest … Continue reading

Low interest rates, capital flows, and declining productivity in South Europe

Joining the Eurozone was once a near unquestionably good idea. Now, the costs of joining the monetary union are under close scrutiny. This column takes a slightly different tack, presenting an alternative perspective on how joining the euro has impacted productivity in southern Europe. It turns out that capital wasn’t allocated efficiently across firms after … Continue reading

Monetary policy in a low growth, low interest rate environment

Speech by Mr Salvatore Rossi, Senior Deputy Governor of the Bank of Italy, at the “Roundtable on Monetary Policy in a Low Growth, Low Interest Rate Environment”, Istanbul Finance Summit, Istanbul, 8 September 2015. Source: BIS website The role of interest rates – short- or long-term, nominal or real – is pervasive in modern economies. … Continue reading

On the FED rate increase. Conceptual pitfalls and monetary policy errors

Hereafter an analysis by Andrew Levin originally published on 11 September 2015 on VOXEU regarding the FED’s monetary policy. As we know the Federal Reserve is on the verge of triggering the process of monetary policy tightening. In this article Professor Levin argues that the rationale for that policy judgement rests on faulty analytical assumptions about the labour market, inflation dynamics, … Continue reading

When low rates beget lower rates (and more debt)

Stefano Fugazzi (ABC Economics) – Between December 2014 and May 2015, an average of $2 trillion in sovereign debt, much of it being issued within the Eurozone, was trading at negative yields. Current interest rates (also known as “policy rates”) are lower than at the height of the 2008-09 crisis both in nominal and real terms. Although policymakers have … Continue reading

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