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Moneycontrol.com >> Message Board >> View Messages >> Economy
   You are here :     Moneycontrol     MMB    Market View      Economy                         Most active discussions of 2006 , 2007 & 2008
Economy policy for Inflation (1)   30-Jun-08 17:33Tracked by (0)  
Posted by:   stox & more on ( 30-Jun-08 17:33 )
The world needs higher interest rates to tackle a clear inflation threat, even though economic growth is likely to be hit harder than most observers expect.

The downside risks for future growth complicate the task of monetary policy, there must in the end be a forceful response to confront the danger that inflation expectations could rise appreciably, with all the attendant problems that would bring and current high inflation in industrialised countries was a temporary blip could not be fully trusted because of a significant rise in consumers' inflation expectations and past failures in accurately predicting rising commodity prices..

Their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect. At the same time, inflationary forces, particularly in emerging market economies, could also prove unexpectedly strong.


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