Monday, August 01, 2016

Deutsche Bank: Not Even Fiscal Stimulus 
Will Save Global Growth
Bloomberg reports analysis by Deutsche Bank that fiscal stimulus is unlikly to be much more effective than monetary policy in stoking global growth .. 
"The current juncture is an opportune time to engage in more fiscal expansion, especially in economies that are operating at less than full capacity, where interest rates are at extreme lows and central banks are unlikely to raise rates in response to fiscally-induced increases in growth. These are conditions that tend to maximize the fiscal multipliers or the responsiveness of the economy to fiscal measures. Among major advanced economies, these conditions are present most visibly in the euro area, less so in Japan, and even less so in the U.S., which is nearing full employment with a Fed that has begun to tighten policy already. Unfortunately, political and structural constraints limit the scope for fiscal action more than might be desired."
LINK HERE to the article

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