Central bank policies have often worsened economic crises instead of resolving them. By raising interest rates in response to inflation, they often exacerbate, rather than mitigate business cycles and inflation.
The world is being pressed by financial interests to raise interest rates, ostensibly to check inflation. After the US Federal Reserve started raising interest rates, more central banks have been doing likewise.
Considering inflation’s contemporary causes, such ‘follow the leader’ central bank mimicry cannot check it except by slowing economies. Worse, this has meant taking on huge new risks, seriously damaging world economic prospects in the medium and long-term.
The space consists of just 300 square meters full of green where there is an agro-ecological vegetable garden and nursery, which are the work and dream of 14 women. Behind it can be seen the imposing silhouettes of the high rises that are a symbol of the most modern and sought-after part of Argentina's capital city.
Once deemed a basic human needs success story, Sri Lanka (SL) is now in its worst economic crisis since independence in 1948. Nonetheless, SL’s ‘moment of truth’ now offers lessons for other developing countries.
As China increases
lending to other developing countries, ‘debt trap’ charges are growing quickly. As it greatly augments financing for development while other sources continue to decline, condemnation of China’s loans is being weaponized in the new Cold War.
When driving at night in Zimbabwe, watch out for a pair of eyes on the road and slow down. You may hit a giraffe inside a pothole. So goes an often-told joke.
The world is sailing into a perfect storm as key leaders seem intent on threatening more war, albeit while proclaiming the noblest of intentions. By doing so, they block international cooperation to create conditions for sustainable peace and shared prosperity for all.
The spectre of ‘stagflation’ threatens the world once again. This time, the risk is the direct consequence of political provocations and war, and not simply due to inexorable economic forces.
Stagflation is a composite word implying inflation with stagnation. Stagnation refers to weak, ‘near zero’ growth, inevitably worsening unemployment. Inflation refers to price increases – not high prices, as often implied.
This week, exactly 20 years ago, world leaders adopted the United Nation’s Monterrey Consensus
. They committed to “Confronting the challenges of financing for development” with a global response and to creating a fully inclusive and equitable global economic system.
“If your only tool is a hammer, every problem looks like a nail”. Still haunted by the clever preaching of monetarist guru Milton Friedman’s ghost, all too many monetary authorities address every inflationary threat or sign they see by raising interest rates.
All too many developing countries have been persuaded or required to prioritize inflation targeting
(IT) in their monetary policy. By doing so, they have tied their own hands instead of adopting bolder economic policies for growth, jobs and sustainable development.
"We started making shampoos and soaps in the kitchen of a friend’s house in 2017. We were five or six girls without jobs, looking for a collective solution, and today we are here," says Letsy Villca, standing between the white walls of the spacious laboratory of Maleza Cosmética Natural, a cooperative that brings together 44 women in their early twenties in the Argentine capital.
All over the world, people expect policies by central bankers trained in economics to have a sound scientific base. But in fact, inflation targeting is an article of faith with neither theoretical nor empirical basis.
Calls, even screams, to fight inflation above all else are getting shriller. Thankfully, even The Economist
(5 Feb. 2022) reminds all, Fighting inflation could put the world in a slump
No inflation consensus
International Monetary Fund (IMF) Managing Director Kristalina Georgieva doubts
the world faces a runaway inflation threat. She urges policymakers to carefully calibrate fiscal and monetary policies, with more “specificity”, as not ‘one size fits all’.
Accustomed for decades to recurring economic crises, and hit hard in recent years by a steady loss of purchasing power, Argentines were informed on Friday Jan. 28 of a last-minute agreement with the IMF which, in the words of center-left President Alberto Fernández, takes "the noose off their necks".
Inflation hawks are winning the day. The latest ‘beggar thyself’ race to raise interest rates has begun. This ostensibly responds to the spectre of runaway inflation, supposedly retarding economic growth and progress, and thus threatening central bank ‘credibility’.
Many countries around the world have punished most of the African continent for the scientific discovery of the Omicron variant through the imposition of travel bans.
When face-to-face Cabinet meetings resumed in Jamaica following more than a year of virtual meetings due to COVID-19, Ministers lined up to have their immunisation cards inspected.
On the streets of Beirut, Hadi Hassoun begs for a few pounds to feed his five children. He has little hope of a job, especially now that the economic crisis in Lebanon has destroyed wealth.
Immediately after its release, the Squid Game went viral, grabbing the attention of the world's entertainment stage. The grotesque and hyper-violent thriller has reportedly become Netflix's biggest show, the world's most-watched and the most-talked-about streaming entertainment. Is it a case of art imitating life?
“The outlook for LDCs is grim”. The latest United Nations (UN) assessment
of prospects for the least developed countries (LDCs) notes recent setbacks without finding any silver lining on the horizon.
Half a century ago, LDCs were first officially recognised by a UN General Assembly resolution
. It built on research, analysis and advocacy by the UN Conference on Trade and Development (UNCTAD).