■, Editor’s note: Some of our covid-19 coverage is free for readers of The Economist Today, our daily newsletter. December 16th 2020 The Economist has always distinguished itself for numeracy and analytical rigour. In Europe, in 2020, it will be better to be a borrower than a lender, A severe economic crunch in India may be inevitable—and beneficial, Attention in Latin America will focus on Venezuela, and how to get economies moving again, Emmanuel Macron will have his eyes on the prize, both in France and abroad, To continue its ascent, the aviation industry will have to become greener, M+, now taking shape in Kowloon, will be a plus for the region, Germany will fail to adapt to a changing world, Artificial intelligence could accelerate research in a range of fields, says Demis Hassabis of DeepMind. The Economist ’s Innovation Summit celebrates a decade in 2020 and we’re imagining the company of the future and also the social and political forces that will shape it. ECONOMISTS LOVE to disagree, but almost all of them will tell you that inflation is dead. Before the pandemic even an ultra-tight jobs market could not jolt prices upwards, and now armies of people are unemployed. Shortening the maturity of the state’s balance-sheet—as in 2020—must only ever be a last resort, and should not become the main tool of economic policy. We consider all interested candidates regardless of discipline or degree preference. Jobs. For delivery to anywhere in the rest of the world, please visit our ROW store at ukshop.economist.com. The Economist is a global thought leader but we aren’t part of the establishment. A report by the Economist INtelligence Unit. Might these arguments prove correct? In the West and in Asia many societies are ageing, creating shortages of workers. Finance ministries should incorporate risks taken by the central bank into their budgeting (and the euro zone should find a better tool than QE for mutualising the debts of its member states). Low inflation underpins today’s economic policy. The search for yield has propelled the S&P 500 index of shares to new highs even as the number of Americans in hospital with covid-19 has surpassed 100,000. Graphic detail from The Economist. Weighed down by the need to pay for an ageing population and health care, politicians will increasingly favour big budget deficits. It is why central banks can cut interest rates to around zero and buy up mountains of government bonds. Yet as we explain this week (see article), an increasingly vocal band of dissenters thinks that the world could emerge from the pandemic into an era of higher inflation. For all the talk about “locking in” today’s low long-term interest rates, governments’ dirty secret is that they have been doing the opposite, issuing short-term debt in a bet that short-term interest rates will remain low. Finance & economics Stuck at home, people have been unable to spend all their money and their bank-balances have swelled. Rather than ignore the risk, governments should take action now to insure themselves against it. It is not guaranteed to last. The average maturity of American Treasuries, for example, has fallen from 70 months to 63. In contrast to the period after the financial crisis, broad measures of the rich-world money supply have shot up in 2020, because banks have been lending freely. So while the probability of an inflation scare may have risen only slightly, its consequences would be worse. As we look ahead, how … Because the reserves they create to buy bonds carry a floating interest rate, they are comparable to short-term borrowing. Predicting the end of this trend is a kind of apostasy. They were about corruption, revolutionaries, Glasgow in the 1980s, John Maynard Keynes and musical lives 2020 The Economist Kapak Yorumlarına SON Noktayı koyuyorum. A temporary rebound in inflation next year is perfectly possible. Copyright © The Economist Newspaper Limited 2021. Last week, I went through a stack of unread issues of my favorite newspaper, The Economist. Even a small probability of having to deal with a surge in inflation is worrying, because the stock of debt is so large and central-bank balance-sheets are swollen. The pandemic could amount to $10trn in forgone GDP over 2020-21. The Economist Intelligence Unit (The EIU) is the world leader in global business intelligence. The British economy will take one of two very different paths in 2020. Who will win the increasingly heated battle over trade and security? In November Britain’s fiscal watchdog warned that a combination of new issuance and QE had left the state’s debt-service costs twice as sensitive to short-term rates as they were at the start of the year, and nearly three times as much as in 2012. The premise of low inflation is baked into economic policies and financial markets. The Economist Events is a part of the Economist Group. But if central banks had to raise interest rates to stop price rises getting out of hand, the consequences would be serious. Our audience is guided by our objectivity and insight on issues as wide-ranging as cryptocurrencies to gay marriage. Now globalisation is in retreat. Enjoy more audio and podcasts on iOS or Android. Your browser does not support the