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Tag Archives: inflation

The life and death of an internet monetary meme

Over the last few years I've increasingly crossed paths with the following claim on the internet: "The average life expectancy for a fiat currency is 27 years." Is this claim true? What definitions are being used? I mean, are we talking about inconvertible paper money here, or currency that was convertible into gold, too? I finally got curious enough that I decided to chase down the source of this meme. After all, without knowing what data it is based on, it's hard to evaluate the claim's...

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Outlook for Latin America and the Caribbean: A Stalling Recovery

By Alejandro Werner Español Economic activity in Latin America and the Caribbean remains sluggish. Real GDP is expected to grow by 0.6 percent in 2019—the slowest rate since 2016—before rising to 2.3 percent in 2020. The weak momentum reflects negative surprises in the first half of 2019, elevated domestic policy uncertainty in some large economies, heightened US-China trade tensions, and somewhat lower global growth. Elevated policy uncertainty in some large economies of the region has...

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Global Trends in Interest Rates

Marco Del Negro, Domenico Giannone, Marc P. Giannoni, Andrea Tambalotti, Brandyn Bok, and Eric Qian Long-term government bond yields are at their lowest levels of the past 150 years in advanced economies. In this blog post, we argue that this low-interest-rate environment reflects secular global forces that have lowered real interest rates by about two percentage points over the past forty years. The magnitude of this decline has been nearly the same in all advanced...

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Cashing In: How to Make Negative Interest Rates Work

By Ruchir Agarwal and Signe Krogstrup Many central banks reduced policy interest rates to zero during the global financial crisis to boost growth. Ten years later, interest rates remain low in most countries. While the global economy has been recovering, future downturns are inevitable. Severe recessions have historically required 3–6 percentage points cut in policy rates. If another crisis happens, few countries would have that kind of room for monetary policy to respond. To get around...

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Building Defenses Against the Next Economic Downturn

By David Lipton عربي, Français,  日本語, Русский The global economy faces a number of complex challenges from technological change and globalization, and the lingering effects of the 2008-9 financial crisis. At the same time, we are witnessing lower levels of trust in the core institutions that have helped to deliver tremendous growth and prosperity over the past 40 years. These developments threaten to fragment the international order that has governed the global economy. History suggests...

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Quiz on the Global Economy: How Much Do You Know?

December 7, 2018 By IMFBlog (photo: Nirodesign/GettyImages by iStock) Inflation, emerging markets, and debt—oh my! The global economy is making headlines and we thought you might like to put your knowledge to the test with our new quiz. Here are eight questions drawn from our latest World Economic Outlook, Global Financial Stability Report, and Fiscal Monitor.  

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Chart of the Week: Words Count for Central Bank Communications in Latin America

By Juan Yepez  October 15, 2018  Effective central bank communications are essential in guiding market expectations (photo: lionvision/iStock) When it comes to central banks in Latin America, sometimes words can speak louder than actions. This is because the public and investors rely on central bank communications to make economic and financial decisions. So, clear and consistent communications from a central bank about policy decisions and the economic outlook are essential to guide...

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Central Bank Credibility Pays Off in Times of Stress

By Rudolfs Bems, Francesca Caselli, Francesco Grigoli, Bertrand Gruss, and Weicheng Lian October 3, 2018 عربي, 中文, Español, Français, Português Shopping center in Warsaw, Poland: emerging market economies have been able to bring down inflation to a low level (photo: Caro/Bastian/Newscom) Since the mid-2000s, inflation in emerging market economies has been remarkably low and stable, in sharp contrast to the 1990s. But rising interest rates in advanced economies like the United States...

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Inflation ist nicht Inflation

Das südamerikanische Land Venezuela führt gerade vor, was geschehen kann, wenn die Inflation ausser Kontrolle gerät. Der Internationale Währungsfonds rechnet bis Ende Jahr mit einer Teuerung von 1 Million Prozent. Eine solche Inflation wird etwa erreicht, wenn sich das Preisniveau rund alle vier Wochen verdoppelt. Wenn sich Geld in einem solchen Ausmass entwertet, verliert es jeden Nutzen, denn dann kann es seine...

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Euro Area Inflation: Why Low For So Long?

By Yasser Abdih, Li Lin, Anne-Charlotte Paret  August 28, 2018 Sculpture of the euro outside the European Central Bank, Frankfurt, Germany: Convergence of core inflation towards the ECB’s medium-term objective is likely to be gradual (photo: Alex Domanski/REUTERS/Newscom) The euro area economy is in its fifth year of recovery, unemployment is close to its pre-crisis level and the output gaps of most countries have closed. Yet, core inflation continues to be low, notwithstanding...

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