Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Co-ordination falls away as the global crisis abates
History may well be kind in its judgment on the international response to the crisis in financial markets. Muddled it may have been, but governments did muddle through. Now the emergency has passed, however, policymakers look set on going their own ways.
Alan Greenspan: Inflation – the real threat to sustained recovery
The former chairman of the Federal Reserve warns that if political pressures prevent central banks from reining in their inflated balance sheets in a timely manner, statistical analysis suggests the emergence of inflation by 2012; earlier if markets anticipate a prolonged period of elevated money supply.
Samuel Brittan: ‘Green shoots’ debate misleads policymakers
World output cannot go on falling at turn-of-the-year rates without the international economy winding down. It is highly likely that we will have before long a quarter or two of stable output – probably first in the US and last in the eurozone, with the UK in between. The interesting question is where we go from there.
George Magnus: State support is vital in times of crisis
Magnus, senior economic adviser at UBS, says that if you think the current costs of the crisis are large, the net present value of the coming surge in age-related public spending over the next 40 years is roughly 10-20 times as big. Consequently, rather than fret about the noise in government bond markets, we need urgently a political consensus for the public sector deleveraging in the years immediately ahead.
Lex on the Fed
Central banks (and central bankers) are at their best when viewed as dependable, predictable and decidedly boring. The less you hear, as a general rule, the better. A period of crisis, plus repeated public scrubbing of the resulting dirty laundry, however, has thrust the Fed into the centre of a very loud debate.
Analysis: Deficit disorder
Once merely a worthy subject of concern, America’s fiscal outlook has rapidly become the object of widespread alarm.
John Authers’ Short View on OECD forecasts
After deep confusion, elements of agreement are emerging. Official economists and investors in different countries that have been affected in different ways by the crisis agree on some points.