The Demise of the Global Price Rule
Abstract
If the United States and other countries abandon inflation targeting, their inflation will become more volatile and perhaps slightly higher. The implication for the rest of the world could be very damaging, especially for the smaller economies who fix their currencies to larger economies. By fixing to the US dollar and/or the Euro, other countries are effectively importing those monetary policies. Hong Kong is a prime example of what we are talking about. Our concerns for the rest of the world are twofold. First, we see the inflation rate rising and becoming more erratic in both the United States and the European Economic and Monetary Union (EMU), if the two regions’ central banks abandon ...
Get Economic Disturbances and Equilibrium in an Integrated Global Economy now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
