郑州幼师学校学费多少:World's Economy: New Leader in Urgent Need

来源：百度文库编辑：九乡新闻网时间：2024/04/28 01:21:20

World's Economy: New Leader in Urgent Need

The famous economist Nouriel Roubini said on June 11 that US Federal Reserve may launch another new Quantitative Easing Monetary Policy by the end of this year, according to NBC news report. He said that if the US economy remains fatigue and the stock market looks down, the possibilities for Federal Reserve to launch third round Quantitative Easing Monetary Policy would largely increase.

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The Financial Times' article "Global policy makers all at sea" (June 12) again proves that the world's economy now needs a NEW leader --

Increased Problems and Risks

Global equity markets have fallen by 6 per cent since the end of April, and have now given back all of their gains for 2011. After appearing immune to higher oil prices and the global economic slowdown for quite a while, investor complacency has disappeared in the past couple of weeks, and stockmarkets have fallen fairly sharply.

In my opinion, this drop has been triggered by the realisation that policy-makers around the world are no longer in any condition to rescue the global economy from a further slowdown, should that occur. Economies, and therefore markets, are currently flying without an automatic safety net from either fiscal or monetary policy. And that brings new risks, compared to the situation which has been in place for most of the period since the 2009.

Wherever one looks on the global policy agenda, problems and downside risks have been mounting. In China, the tightening in macro policy which started in early 2010 seems to be succeeding in bringing overheating under control, but fears of a hard landing are mounting. Similarly, in most other emerging economies, monetary policy is being tightened in response to higher headline inflation rates.

In Europe, the ECB signalled last week that it remains determined to raise interest rates in July, and the risks of a catastrophic row between the ECB and the German Finance Ministry about the handling of Greek government debt took a nasty turn with the publication of the Schauble letter on debt restructuring. President Trichet clearly believes this letter is incendiary. In the UK, the IMF gave qualified backing to the government’s Plan A on fiscal tightening, but with the very same breath said that Plan B might be needed if the economy slowed further. In the OPEC meeting, Saudi Arabia failed to win agreement for an increase in the production quota, and then said that it would unilaterally ignore the quota.

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Desperate Federal Reserve

If all that were not sufficiently unsettling, any appearance of a coherent approach among policy makers in the US has been exposed as a facade. Almost unbelievably, some parts of the Congress actually appear to be considering whether a technical default by the federal government – universally viewed as the safest credit in the global financial system – might have certain advantages! No-one yet believes that this could actually come to pass, but here is what the normally mild mannered (and always intelligent) Barry Eichengreen of Berkeley says about it:

Evidence that the inmates were running the asylum would almost certainly precipitate the wholesale liquidation of US Treasury bonds by foreign investors…The result would be the Fed’s worst nightmare. With Treasury yields spiking and economic activity collapsing, the Fed would want to cut interest rates and flood the markets with liquidity. But a sharply lower dollar would, at the same time, mean sharply higher inflation, requiring it to tighten policy.

Caught on the horns of this dilemma, the Fed could do nothing to solve America’s problems.

Bernanke regularly warns of the dire consequences of not facing the country’s fiscal problems head-on. Congress, indeed everyone in America, should take him seriously.

Professor Eichengreen’s is right, and his image of a powerless Fed is probably the one which is worrying the markets the most. As recently as two weeks ago, I wrote here that the markets were almost certainly wrong to be assuming that QE3 was just around the corner. In fact, the Fed was, for the moment, “out of ammo”. That became transparent last week in speeches from Chairman Bernanke and William Dudley, who was the Chairman’s main outrider when the Fed was contemplating QE2 last year.

The tone of the latest Dudley speech was markedly different from his speech last October which signalled that QE2 was just around the corner. Then, Mr Dudley said baldly that US inflation was “too low”, and that the levels of both inflation and unemployment were “unacceptable”. By contrast, in last week’s speech Mr Dudley said the following:

With respect to inflation, after a period when inflation was lower than the Fed would like to see, headline inflation (on a yearly basis) has risen somewhat above desired levels… Most measures of underlying inflation trends—including core inflation (which excludes volatile food and energy prices)—remain below levels consistent with our mandate for price stability.

This statement is far more nuanced that the ones which preceded QE2 last year. Mr Dudley went on the explain that QE2 in 2010 had been intended “to prevent a relapse into recession and to lessen the risk of deflation”. With no-one at the Fed currently predicting either a double dip recession, or much of a risk of deflation, they are sitting on their hands.

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Lack of Coordination Among Policymakers

Even Mr Bernanke, who was at pains throughout the crisis to emphasise that the Fed had plenty of options available to ease policy, has recently been talking about the limits to monetary policy. As he said in his speech last week, although there was still a lot wrong with the economy, “monetary policy cannot be a panacea”. Far from confidently striding towards QE3, the Fed seems to be focused on what others can do to improve the performance of the global economy. In particular, Fed leaders are repeatedly pointing to the need for a long term plan for fiscal consolidation in Washington, and (in Mr Dudley’s case at least) to the need for a new approach to exchange rate and other macro policy in Beijing.

Even more than is usually the case, there is a severe lack of co-ordination among policy makers around the world. That applies to those who make fiscal and monetary policy within both the US and the Eurozone. And it applies to the co-ordination of policy among the major blocs, like the US, China and Europe.

In fact, almost everyone in authority seems to be extremely dissatisfied with the behaviour of someone else. And that is not a good starting point, should the need for co-ordinated action arise. The world economy needs a new leader – Stanley Fischer, for example.

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