Compassionate Deficit Reduction vs the Fiscal Cliff
Last week both the U.S. Federal Reserve and the European Central Bank made big policy commitments to support the global economy (see Pacific Beat— U.S. and Europe Central Banks Announce Major Policy Changes). But monetary policy is facing an uphill battle at home and in Europe as governments implement austerity programs aimed at reducing deficits. In […]
Read MoreQ & A: Pacific Beat— U.S. and Europe Central Banks Announce Major Policy Changes
1. BOTH THE U.S. FEDERAL RESERVE AND THE EUROPEAN CENTRAL BANK MADE BIG POLICY COMMITMENTS LAST WEEK. WHAT DID THE FED DO? The U.S. Federal Reserve launched a program known in the media as “QE3”. The program involves Fed purchase of long-term bonds and is designed to bring down long-term interest rates. The program announced […]
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