Ever since the 2008 financial crisis, pessimists have been saying we are due a global inflation surge. So far they’ve been wrong. The world’s economies, particularly the rich ones, have sucked up fiscal and monetary stimulus and the biggest official concern has usually been that the inflation rate is too low.
But even a stopped clock eventually shows the right time. Given Covid-induced monetary and fiscal overdrive, might the worriers finally be proved right?
Continue reading “No need to worry; the consensus says inflation isn’t going to be a problem”
India’s decision not to join the Regional Comprehensive Economic Partnership promoted by China is politically significant. But its impact on trade and prosperity is more nuanced, as Bloomberg explains.
It avoids some market opening on both sides (India to agriculture; others to services) that would have been economically beneficial. But the greater significance of the pact is the restrictions on access it would impose on those outside the regional trade grouping.
“Still, the effect of harmonizing standards at the regional-agreement rather than global level is the opposite of an opening of trade … The standards that are established across the zone inevitably resemble those of its largest member. That would be fine in a global agreement, but in a regional deal the effect is to raise barriers to nations outside the bloc with different rules.” Continue reading “China and India’s regional trade squabble echoes in Europe”
This blog asked whether Donald Trump might have made a serious error – perhaps even a fatal one – when he acquiesced in Turkey’s attack on America’s Syrian-Kurdish allies. He managed to irritate key supporters in the US Senate and early polling suggested a drop in support for his Middle East policies among Republican voters.
Failure to stand up for allies, dislike of Turkish self-assertion, fears of an ISIS resurgence and a sense that the US was being railroaded, all seem to have played some part in this reaction.
But for an explanation of why this might work out splendidly for the US (and Donald Trump), look no further than the piece by Israeli political analyst Zev Chafets on Bloomberg. Continue reading “Who made the bigger mistake in Syria: Trump or Putin?”
LONDON CORRESPONDENT: One of the irritations of the Brexit debate is the triumph of media virtue-signalling over analysis. So its well worth reading a piece on Bloomberg which superbly summarises the issues of Britain and the EU trading under WTO rules (ie, after a ‘no deal‘ Brexit) and then thinking about how this might influence the outcome of the current negotiations.
First, the article acknowledges that tariffs are generally low (typically 2 -3 %) and therefore are not really an issue, except in some “critical” sectors of the economy, such as “cars, dairy and chemicals“. “Critical” is useful journalistic shorthand, in this case probably meaning a politically and media-sensitive but numerically modest part of economic output. Continue reading “Demystifying hard Brexit – a summary of the issues facing the UK and EU”