WHEN the Middle East conflict began in October last year, the conventional wisdom was that nobody had an incentive to allow this conflict to spread to the rest of the region.
Since then, we have had a series of minor escalations. In isolation, none of them seem that significant. But collectively they add up to a significant broadening of the conflict. Does this mean something will happen that will lead to a sudden re-evaluation of the outlook for growth or inflation?
I am reminded of the concept of “fingers of instability”. This describes a situation where if you add a grain of sand to a sandpile, it is unlikely to lead to a significant change in the structure of the sandpile. However, if...
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