Every year the executives of the US Federal Reserve System gather in Jackson Hole, Wyoming for an annual financial symposium. At this year’s meeting, everyone was expecting the position of Fed chief Jerome Powell. And the message from the American central banker was clear: at the moment the priority is to reduce inflation. The direction …
Category: PUBLICATIONS
The US “Productivity Paradox” appears again
The recent release of data on non-farm labor productivity in the US economy confirmed concern about a continued downward trend in this critical indicator. Labor productivity fell in the second quarter of 2022 by 4.6% as output fell by 2.1% and total hours worked increased by 2.6%. Compared to a year ago productivity fell by …
Risk Management in the Digital Transformation of Businesses
The rapid scaling of innovation and emerging technologies have fundamentally changed the way products, services and business operations are delivered. Recognizing, understanding and addressing new risks associated with digital transformation and innovation will help businesses take the right actions and decisions to deliver greater value in the future. Risk management should be an integral part …
What do the Spread Control Mechanism mean for the EU Economy?
The 50 basis point increase in the ECB’s deposit rate, double what the ECB had initially communicated and in line with the hawks’ wish, was combined with the announcement of a new spread control tool, the Transmission Protection Instrument (TPI). The threat of recession is greater in Europe: the war in Ukraine and the energy …
Euro-Dollar Parity 1:1- Europe takes Steps Backwards Compared to the US
Each currency reflects the reality in the economy and is a tool of a specific economic policy. Reflecting at the same time, the general situation of the period, it is a matter of time, as everything shows, for the parity of the euro against the dollar to reach the absolute one-to-one and to fall below …
How Can Fiscal Policy Tackle Stagflation?
Economic policy generally has many objectives. To increase income and employment, to keep prices stable, to ensure the sustainability of public finances, to provide adequate liquidity conditions and so on. Usually these goals relate to reactions to economic disturbances, such as an economic crisis, a pandemic, a war, or anything that threatens the financial well-being …
Stagnant Inflation Management
In recent times, the global economy has entered a strong inflation component based on ever-increasing energy and food prices. If the causes of price increases are limited to the region of Europe, and given that the EU is purely an importer of energy, one could argue that this is an “imported inflation” over which monetary …
Emerging Stagnant-inflation in the Eurozone/EU & USA
Inflation begins to make a threatening appearance in the EU and US since last summer due to a combination of dynamic economic recovery in COVID-19 conditions, serious problems in international trade and supply chains and upward trend in international oil and mainly gas prices. Inflation had reached high levels before the Russian invasion of Ukraine. …
High probability the Price of Brent to Remain over $115 by the End of 2022
The recent EU deal on a Russian oil embargo has put upward pressure and volatility again, with Brent prices hovering well above USD120 last week. Trust Economics (https://trusteconomics.eu) estimates that developments in the oil market are expected to hit growth. The geopolitical risk and the EU agreement will keep oil prices high during the summer …
Where are the Economies and Businesses going after the Pandemic and War crises?
The West is also involved in the conflict between Russia and Ukraine, imposing successive sanctions on Russia, while Russia threatens to close the energy supply tap to Western countries. Transiently continuing volatility in the stock markets is normal and expected. After all, the big fluctuations also result in the big benefits-profits, for those, of course, …