Entries filed under 'International Economy & Policy'

    Global Economy: Developments to Watch after Paris

    November 19, 2015 4:20 PM by Zane Brown

    What should investors be monitoring in the wake of the attacks on November 13? 

    As governments respond to the threat of terrorism in the aftermath of the November 13 attacks in Paris by Islamic State (IS), some developing trends may have significant economic implications. 

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    Deflation: What's the Problem?

    July 24, 2014 11:44 AM by Lord Abbett Editorial Staff

    In the Eurozone, as elsewhere, heavily indebted countries will be hurt most.

    Economic growth in the eurozone continues to be weak, and inflation has been declining as well. Like most central banks, the European Central Bank is concerned about the possibility of deflation and is implementing policies to combat it. But is deflation really a problem?

    Financial journalist James Grant and others have argued that deflation is not the problem it’s made out to be. In fact, it is the natural result of improvements in efficiency that have resulted from computer technology and the Internet. If business costs have been reduced dramatically, it only makes sense that consumer prices would also come down. This kind of deflation is also known as a higher standard of living, says Grant.  

    So why do central banks consider deflation the enemy?

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    Why Europe May Attract More Investor Attention

    April 23, 2014 2:01 PM by Harold E. Sharon

    After years of lagging the global economic recovery, Europe is showing signs that it can stave off deflation and rekindle meaningful growth.

    Harold Sharon, Lord Abbett Partner and International Strategist

    While other major economies have recovered at varying rates from the global financial crisis, the eurozone has been the clear laggard. For Europe, stimulus came late, was very hard to coordinate in a timely way, and was diluted over time.  The upshot is that Europe, if policymakers can agree, has more room to accommodate further measures, such as central bank support, fiscal reforms, and structural economic reforms.  If so, there may be more reaction still ahead in Europe that can support the capital markets, and perhaps this warrants more investor attention for that reason alone.

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