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Global economy caught in monetary easing trap

Fiscal policy if followed now will increase public debt, augmenting net interest payments and forcing the trap to snap.

Published Thu, Dec 10, 2015 · 09:50 PM

THE US Federal Reserve contemplates an interest rate hike, bringing quantitative easing to an end.

The European Central Bank has just confirmed that it continues to pump money into the economy aiming at further stimulating growth. Odds are high for China to move towards zero interest rates in the course of 2016. Japan's central bank has no room to manoeuvre, faced with an economy in technical recession.

Central banks apparently pursue discordant policies.