Fri, Nov 28, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: A return to boom and bust

Thursday, July 30, 2009

This article was written by Bryan Goh, First Avenue Partners LLP, London: Does the printing of money by central banks inevitably lead to inflation? Is there good inflation and bad inflation?

Quantitative easing is now underway in most developed countries in some form or other, most notably in the US, UK and Europe. It hopes to make up for the decline in transactions for a given stock of money by increasing the stock of money for a given level of transactions. In fact it hopes to more than make up for it. If successful, what does it create in growth of price level and output? It should result either in higher prices for a given level of output, or a higher level of output for a given price level, or both. While on the one hand the stock of money and rate of transactions are scalar quantities, on the other hand the prices and outputs are vectors whose product is scalar. That means that not only are we uncertain about whether the impact of success of quantitative easing is on price or output, we don't know which markets are reactive to it.

Common sense would imply that capacity constrained markets are more likely to see price inflation as opposed to real growth while the impact in markets with excess capacity are likely to be on output. Income and substitution effects complicate the analysis of the system as a whole. There may be no impact in some markets either in price or output. However, there must be at least one marke......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Unlucky Paulson & Co. rebrands $1.6bn Recovery Fund after 13% drop[more]

    From Businessweek.com: A maturing U.S. economic recovery is prompting Paulson & Co. to change course. The $19 billion hedge fund firm, led by billionaire John Paulson, told investors on a conference call this month that the Paulson Recovery Fund will be renamed Paulson Special Situations Fund on Jan

  2. Opalesque Roundtable: Islamic Finance races ahead with Sukuk, the first managed account platform, and foreign demand[more]

    Komfie Manalo, Opalesque Asia: A number of developments took place within Islamic finance in the past years, including the launch of a Islamic managed account platform and the further growth of the sukuk space that saw this instrument evolve from being a type of an ABS security that was rarely

  3. Fund Profile - A complex hedge fund strategy works for United Technologies[more]

    From Institutionalinvestor.com: Reports that portable alpha is dead have been greatly exaggerated, as Mark Twain might have phrased it. Another Connecticut Yankee, giant United Technologies Corp., is gearing up to grow its successful, nearly decade-long portable-alpha program. The UTC strategy took

  4. Opalesque Exclusive: The unintended consequences of Basel III[more]

    Benedicte Gravrand, Opalesque Geneva: Bijesh Amin, co-founder and managing director of Indus Valley Partners (IVP), a technology solutions and services firm focused on the alternative asset management industry, has recently observed

  5. Legal - Six years after AIG takeover, lawsuit reveals another potential buyer[more]

    From Institutional investor.com: When former Treasury secretary Henry (Hank) Paulson Jr. testified in a suit last month about the U.S. government takeover of American International Group, his words were — mostly — numbingly familiar. Explaining the “punitive” terms set for the September 2008 bailout