yaakov Posted October 9, 2007 Share Posted October 9, 2007 (edited) I suppose it depends on how you define stable. I would argue from the business point of view that they have been stable, i.e. no sudden rate shocks as in previous decades.This chart is a couple of years out of date but you get the picture (Inflation targetting began at the end of 1992) That may be the case for some people, but if you look at the bigger picture it's nowhere near as bleak as that. Some people argue that the previously benign global economic environment was due to the "China effect" and that this was a one off event. This effect could be fading away now - I think is what Greenspan believes. I think it is certainly difficult to claim our Government is responsible for something that has been a worldwide effect. Edited October 9, 2007 by JimmyMac Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted October 9, 2007 Share Posted October 9, 2007 Some people argue that the benign global economic environment is due to the "China effect" and that this is a one off event. This effect could be fading away now.I think it is certainly difficult to claim our Government is responsible for something that has been a worldwide effect. I think you have misinterpreted me. Our government/MPC are responsible for choosing a monetary policy that best suits our position within the global economy. PM argues that the (govt/MPC/inflation targetting) have got it seriously wrong wrt interest rates. I'm suggesting that they haven't. (i.e. no rate shocks, stable employment levels, low inflation and stable GDP growth) Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted October 9, 2007 Share Posted October 9, 2007 I think you have misinterpreted me. Our government/MPC are responsible for choosing a monetary policy that best suits our position within the global economy. PM argues that the (govt/MPC/inflation targetting) have got it seriously wrong wrt interest rates. I'm suggesting that they haven't. (i.e. no rate shocks, stable employment levels, low inflation and stable GDP growth) hello WAP, I see your still swimming against the tide. Quote Link to comment Share on other sites More sharing options...
yaakov Posted October 9, 2007 Share Posted October 9, 2007 I think you have misinterpreted me. Our government/MPC are responsible for choosing a monetary policy that best suits our position within the global economy. PM argues that the (govt/MPC/inflation targetting) have got it seriously wrong wrt interest rates. I'm suggesting that they haven't. (i.e. no rate shocks, stable employment levels, low inflation and stable GDP growth) Oh I see what you mean. We'll have to see who is right. Nevertheless, the point still stands that it is rather easier to to set interest rates in a benign global evironment as we have had for the last several years than compared with the past. My related point is that the same thing has also been true in most other developed countries around the world including the US. i.e. a long period of stability up until now. We're now starting to see more and more problems emerge in the US. I don't think it can be argued easily that we will escape similar problems. Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted October 9, 2007 Share Posted October 9, 2007 Oh I see what you mean. We'll have to see who is right. Nevertheless, the point still stands that it is rather easier to to set interest rates in a benign global evironment as we have had for the last several years than compared with the past.My related point is that the same thing has also been true in most other developed countries around the world including the US. i.e. a long period of stability up until now. We're now starting to see more and more problems emerge in the US. I don't think it can be argued easily that we will escape similar problems. Hang on, how do you define "who is right?" (not that it matters too much to me) A huge recession/nominal HPC? Quote Link to comment Share on other sites More sharing options...
yaakov Posted October 9, 2007 Share Posted October 9, 2007 Hang on, how do you define "who is right?" (not that it matters too much to me)A huge recession/nominal HPC? Yes, OK, you are right that starting with Kenneth Clarke we have seen stability in the economy so you could argue that they have done a good job up till now. Whether they have done a good job for long term stability I am not so sure. I would tend to think that they have not and that a large recession and HPC is a major possibility. I am led to believe that we are particularly exposed, see link below that has been posted here before: http://www.ft.com/cms/s/0/0ecb34d0-72a8-11...00779fd2ac.html However, I am not an economist and don't fully understand everything. In fact I don't have too much faith in economists anyway. Quote Link to comment Share on other sites More sharing options...
evictee Posted October 9, 2007 Share Posted October 9, 2007 (edited) Ooops. Wrong thread. Edited October 9, 2007 by evictee Quote Link to comment Share on other sites More sharing options...
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