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Oecd Slashes Growth Forecasts For Leading Economies

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http://www.theguardian.com/business/2014/sep/15/oecd-global-economy-ecb-qe

The global economy faces headwinds from a sluggish eurozone and rising political tensions, including the uncertain outcome of Scotland's independence referendum, a leading thinktank has warned.

The Organisation for Economic Co-operation and Development (OECD) has slashed its growth forecasts for advanced economies and called on the European Central Bank to use quantitative easing to shore up the eurozone.

Updating its economic outlook ahead of a G20 meeting of finance ministers in Australia this week, the Paris-based OECD described continued slow growth in the euro area as the "most worrying feature" of its new projections.

OECD deputy secretary-general Rintaro Tamaki said: "The global economy is expanding unevenly, and at only a moderate rate. Trade growth therefore remains sluggish and labour market conditions in the main advanced economies are improving only gradually, with far too many people still unable to find good jobs worldwide.

"The continued failure to generate strong, balanced and inclusive growth underlines the urgency of undertaking ambitious reforms."

Quick more QE please to rescue the recovery.....

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http://www.bloomberg.com/news/2014-09-15/oecd-trims-developed-world-growth-forecast-as-risks-build.html

The OECD, which advises its 34 member governments on economic policy, urged European officials to learn lessons from Japan where inflation expectations didn’t flag a later descent into deflation.
“The experience of Japan in the 1990s is a reminder that such expectations measures can be poor predictors of the actual future rate of inflation,” the OECD said. “The 6-to-10 year consensus expectations in Japan were similarly near 2 percent in the early 1990s, failing to foresee the descent into deflation.”
An interesting statement.
Edited by Ash4781

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http://www.bloomberg.com/news/2014-09-15/oecd-trims-developed-world-growth-forecast-as-risks-build.html

“The experience of Japan in the 1990s is a reminder that such expectations measures can be poor predictors of the actual future rate of inflation,” the OECD said. “The 6-to-10 year consensus expectations in Japan were similarly near 2 percent in the early 1990s, failing to foresee the descent into deflation.”

An interesting statement.

That's what happens when you model an economy using comparative statics and general equilibrium theory.

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