Fig Leaves For Raising Interest Rates

Central banks are increasingly altering the perception of their reaction functions to allow tighter (or less easy) monetary policy. At the ECB, discussion of so-called “supercore” inflation has re-emerged. This consists of the components of the HICP basket that have a...

European Recovery: Periphery Loan-growth Needed

One of the aims of loose monetary policy is to boost lending.  The theory is lower rates and greater availability of liquidity will encourage lending and borrowing, which in turn will boost economic activity.  Unfortunately, an increased supply of loans does not...